What is Forward auction?
An auction format often used for sale or disposal scenarios where bidders compete upward.
Definition
A forward auction runs in the conventional direction: sellers offer an asset and buyers bid the price up. In procurement it is used for disposal rather than acquisition - surplus inventory, scrap, obsolete equipment, or tradable instruments the organisation holds and wants to convert to cash.
How it works in practice
procurEngine has been used for exactly this. A staples exporter monetised export scrips through a forward auction, using competitive tension to establish a defensible market value rather than accepting a negotiated bilateral price - see the export scrip case study. Scrap sale and equipment sale are the other common applications.
Why it matters
The discipline is the same as any competitive event: a clear lot definition, qualified participants, and a documented trail from invitation to award. What changes is the direction of price movement.
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