It connects the dots for all parties involved; suppliers have clear specifications of the job at hand, while buyers can undertake due diligence on suppliers and the auction as a whole. Equipped with this, companies can leverage reverse auctions to maximize cost savings and increase business impact.
When used in the right categories (commodities or services with low cost of switching), the reverse auction is the most effective tool for maximizing savings and creating value.
By sourcing goods and services in this way, companies can specify exactly what they want and allow vendors to vie for their business, which typically leads to a decrease in purchase prices. Companies can save 10-20% or more when they use reverse auctions for their method of procurement.