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Procurement glossary

What is English Auction (Reverse)?

A reverse auction format where suppliers continuously lower their bids, competing to offer the lowest price.

Definition

In a reverse English auction, bidding is open and descending. Suppliers can see the leading price or their own rank, and each new bid must improve on the current best by at least the configured decrement. The event runs until no supplier is willing to improve further.

How it works in practice

This is the format most people picture when they hear "e-Auction". A buyer opens a two-hour window on a logistics lane; six carriers bid, each undercutting the leader; the last improvement triggers a time extension, and the event closes a few minutes later once movement stops.

Why it matters

It produces the clearest price discovery of any format because competitive pressure is visible to every participant. It also exposes the buyer's own discipline: if the specification is loose, suppliers bid on different scopes and the ranking is meaningless.

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