There's still a lot of confusion about the multiple types of auctions. This blog is to clarify all the confusion. Mainly, there are only 2 types of auctions – forward and reverse auctions. Of course, there are many variations based on a number of factors, which include the progress of the auction and the basis on which the “winner” is decided.
What are Forward Auctions?
In the Forward auctions,
a single seller offers an item for sale which is kept for auction. Buyers then bid to obtain this product by bidding a higher price. These auctions are more renowned and understood by people at a larger platform that reverse auctions. People know how these auctions function as they are widely used. Forward auctions are implemented when the goal is for the seller to gain maximum monetary benefits from the auctioned product. Forward auctions are thus only used in case the auction is being used to generate sales of the products, irrespective of the kind of service (online, offline or both).
What are Reversed Auctions?
Other than Forward auctions, the only other major auctions are the Reverse auctions. A single buyer makes the prospective sellers aware of their intention to buy a particular product or service. When a Reverse auction begins, the sellers start bidding against each other to win the buyer's product. This will drive the price downwards. So, the winner is the one who offers the lowest price. In most cases, Reverse auctions are used for procurement of private companies, nonprofit organizations, and public sector agencies.
This form of the auction has been proved to be extremely useful when it comes to a longer association of indirect spend and delivering savings and process efficiency.
Forward and Reverse auctions are the only major forms of auctions and are the most used forms of auctions too.
Forward and Reverse online auctions can be set up using the WordPress Auction plugin - WPAuctionSoftware.