Difference Between Price e-Auctions & Rank e-Auctions
Our esteemed clients often consult us on how to go about auctions. Auction, by the very word, does induce excitement. However, achieving business objectives through eAuction is not very straightforward. It requires thorough analysis and planning. In this interesting blog, we share with you what is often asked to us by clients – how do you decide between when to go for Price eAuction and Rank eAuction.
What is Price e-Auction and when does it work?
In Price eAuction, the bidders get to know the leading bid and their own last bid. For instance, in case of Reverse eAuction, the lowest bid is visible to all the bidders while in the case of Forward eAuction, the highest bid will be known to all the bidders. Price eAuction is best suited for commodities that have an open prevailing price range in the market.
What is Rank e-Auction and when does it work?
This is an interesting type of auction where the bidders are not able to see the bid price of other participating bidders. Bidders can see their own rank and own last bid amount. This kind of auction works when procurement of services is required. For instance – consulting services, audit services, training services and & transportation services. Since these services don’t have a standard price in the market, bidders – the service providers tend to lower down the prices aggressively in a guesstimate fashion.
Unequivocally, it facilitates higher decrements in reverse eAuctions as the bidders have to outguess other bidders by decreasing the bids. No one knows how much do they need to lower the bid to become the lowest bidder and win the contract.
At times, the service seeker may not want to disclose the final price of the procured service in the market and hence this auction type does help in keeping the price confidential.
Hope you find this piece interesting and exciting to share.
Happy eAuctioning! We love, when you comment and share your feedback/doubts.