This article was first published by Outsource at http://outsourcemag.com on June 29, 2017.
Procurement organizations have been using reverse auctions in sourcing events for decades as a means to reduce spend, introduce new vendors into the supply base and remain competitive in the market. While reverse auctions have flourished since the mid 1990’s, they have also been heavily scrutinized. Trends like reverse auctions have forced suppliers to adapt to competitive business practices or become inconsequential. As procurement tools become more streamlined, practices like reverse auctions are more commonplace in sourcing events; however, they continue to harbor negative connotations. Amidst this controversy, buyers and suppliers continue to see benefits from reverse auctions, but the myths surrounding this mode of buying power prevail: