reverse auction

A reverse auction is an auction principle that is used in e-auctions.

At the beginning, the provider sets a maximum price for a clearly defined good (quality and specification) and quantity. After that, the participating bidders of this good can bid for the lowest price. This means that, unlike in a traditional auction, prices fall in the bidding process until none of the bidders is willing to continue to bid an even lower price. Reverse auction is an effective method to get the best possible price from its suppliers.