The return of the reverse auction?

Is Buxton’s theory of cost reduction about to kick in for 2008?  Recap: reverse auctions are most fashionable when people feel that there is an economic/house price slowdown on the cards.

I’ve been banging on about reverse auctions for some time now – and to be honest the response I’ve had has often been along the lines of “Fair enough, but we’ve seen it all before. Now, where did I put my sustainable sourcing strategy?”

And yet recently the stars have been (re-)aligning around e-auctions. Are reverse auctions about to become flavour of the month again?

Supply Management, having been silent on reverse auctions for a long time, runs a piece of research about their take-up. This has stimulated some debate – their letters page in this issue (13th December) carries both for and against views.

Michael Lamoureux laid into some reverse auction myths

David Bush talks about a “recent trend of running into a great deal of new content about reverse auctions” here:

Even Tim Minahan – whose only mention of e-auctions that I can recall in recent history was a case study of Sun (a Procuri client) – has come out with 3 (yes, 3) posts here, here and here about e-auctions in the past week or so.

If this is the beginning of a pro reverse e-auction groundswell then I hope:

  1. We see an increasing professionalism in the use of e-auctions
  2. We see an increasing take up, in the private sector, of e-auctions that consider non-price factors
  3. We stop talking about dutch auctions, because they are still rubbish
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3 thoughts on “The return of the reverse auction?

  1. Thanks for the post, Doc and I do agree with all the comments in your Ethics section.

    But I think that calling this behaviour “ethics” is part of the problem.

    Ethics is about child labour and sweatshops and sustainability … here’s a link to the current issue of Supply Management which debates some uncomfortable ethical points http://www.supplymanagement.com/EDIT/CURRENT_ISSUE_pages/CI_opinion_item.asp?id=17198

    On the other hand, committing not to have shill bidders in your events (or rabbits or phantoms as you call them) is committing not to behave fraudulently. We need to get to a point with auctions where the results of the auction are considered in the same light as invoices or purchase order or contracts. So that if someone chooses not to honour the results of the auction this is considered in the same light as when a large retailer (or GM, as in SpendMatters’ post this morning http://www.spendmatters.com/index.cfm/2007/12/17/GMs-Supplier-Relationships-Nowhere-to-Move-But-Up) refuses to honour invoices.

    Certainly this is the sort of path we moved down at TradingPartners: We started putting together an ethics policy a long time ago but by the time we’d finished we realised that there wasn’t anything nice and fluffy about it – it was just about the best way of getting the best results from your auction programme. So it became a Code of Practice rather than an Ethics Policy.

  2. Pingback: Reverse Auctions in a downturn (1) « Where Next

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