eAuction

Reverse and Forward eAuction | Auction Types | Auction Best Practices | Sourcing and eAuction | Promena Auction Platform

Reverse Auctioning. Online Reverse Auction (ORA) and Online Forward Auctions (OFA) have emerged as a key e-procurement tool since the mid-1990s, nowdays Reverse Auctioning and Forward Auctioning has evolved from a normal auction to a set of six different eauction types because of their potentially significant positive impact on the profitability of both the buyers and the sellers. These companies reap the benefits of a streamlined, efficient, and fair sourcing process, ensuring significant cost savings (e-auctions generally provide savings of >7% compared to previously negotiated prices).

Electronic Auctions is a strategic step of value-add in advanced purchase-sale (reverse auctioning for purchasing events) or Sale-Purchase (forward auctioning for sale events) negotiations. It is a business process in which competitive information is shared real-time between buyers and sellers. During the eauction the prices of products or services are managed in a downward direction (for purchase events) or upward (or also called forward e-auctions for sales events).

Kummerk offers both, Software as a Service leasing eauction licenses where companies may run unlimited eauction events by themselves and e-Auction Managed Services where a Promena-Kummerk professional runs and manages the event using Promena eAuction on behalf of the client. To request more information please click on the "Contact us" link below.

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Auction Types

English e-auction
Used for both purchasing and sales events. Competition information (leading or not, ranking, best bid, distance to ahead/behind competitor) is displayed to participants. Participants revise their own bids with respect to that information.

Yankee e-auction
Used only for purchasig events. This format should be preferred if the suppliers cannot supply the whole quantity. The bid direction is ‘up’. T he buyer defines starting price, bid steps and time steps. The suppliers can validate a quantity on each step. Several winners are possible with different prices and different quantities.

Dutch e-auction
Used for both purchasing and sales events. The buyer defines: starting price, bid steps, time steps final price and # of winners. Price level will change at each time step. The auction ends if the # of participant s a ccept ing a price level is equal to defined # of winners.

Brasilian e-auction
Used only for sales events. This format should be preferred if the participants cannot buy the whole quantity. The bid direction is [down]. The seller defines starting price, bid steps and time steps. The participants can validate a quantity on each step. Several winners are possible with different prices and different quantities.

Japanese e-auction
Used for both purchasing and sales events. The buyer defines starting price, bid steps and time Participants validate price levels that are offered by the system in order to accept the current price and to stay in competition. Those who fail to validate will be automatically excluded from the auction.

English e-auction
Used for both purchasing and sales events. Competition information (leading or not, ranking, best bid, distance to ahead/behind competitor) is displayed to participants. Participants revise their own bids with respect to that information.

Total-Cost-of-Ownership e-auction
Used for both purchasing and sales events. Additional cost terms may be added to each bidding line, item or service providing the seller or buyer complete visibility into the total-cost-of-ownership of the good or service (e.g. Including freightage, moving and handling, custom taxes, insurance costs, etc). Cost terms may be visible or not to competitors. Competition information (leading bid or not, Bid increment or decrement, Ceiling price, ranking, best bid, distance to ahead/behind competitor) is displayed to participants. Participants revise their own bids with respect to that information.

Weighting e-auction
Used for both purchasing and sales events. This is also called Bid-Transformation auction. Additional advantage or disadvantage cost terms may be added to each bidding line; this is provided by the auction administrator and hides the information to the auction participant. this increases or diminishes total-cost-of-ownership of the item (e.g. Adding a quality-check cost to a non-compliant supplier). Competition information (leading bid or not, Bid increment or decrement, Ceiling price, ranking, best bid, distance to ahead/behind competitor) is displayed to participants. Participants revise their own bids with respect to that information.

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Auction Best Practices

Response times of eauction platform. In particular, an Auction System should have acceptable system availability and response times in order to minimise outages during normal business. Each auction system operator must make an undertaking that members would be treated impartially, as well as set in place sanctions for the breach of such contractual undertakings.

Flexible Access from Various Locations. Promena is a flexible eauction system where users and administrators may access from any mobile or any-size deviced as Promena is webbased and viewport user responsive.

Preparation for Price and Item-Size Protection. The auction administrator has to make sure has set the right parameters before posting an eauction . Issuers should aim to provide functionality allowing for price and size protection purposes.

Preparation. Conduct a RFP or RFQ before the auction. Always conduct a Request for Proposal to asses market conditions. Suppliers or Buyers' responses to the RFx may be inlcuded as statring set price or initial bid as a base line in the auction.

Examine cost terms. Examine cost terms that may affect item or service price or total-cost-of-ownership before the auction starts.

Communicate with auction participants. Ensure that participants understand event terms, condition and timing. Make sure everyone understands clearly registration instructions and bidding instructions before the eauction event starts.

Run a practice eauction. Give participants time to prepare participating on a practice event similar to the live event but never with real items or market prices. Let them know the rules of the event and make sure they know how to enter bids in Promena. Let them know they may need access to pricing discounts and rebates approval during the event duration.

Allow for eAuction Extension. If necessary automate the event auto-extension set to trigger in the last minute, meaning if a user bids in the final minute Promena auto-extends the event for the an pre-specified limited time.

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Our tailspend managed services focus on our clients' needs and business opportunities. When purchase officers spend time managing tail expenses, it prevents them from focusing on expenses that would create added value, and this increases unproductivity. Kummerk steps in at this point, takes the burden from your company and provides a service that exceeds your expectations with its expertise and broad supplier network in different categories.

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