Reverse auctions have been a popular topic in recent years because they can make huge savings for buyers and new markets for sellers. But they also carry risks. The three main motivations, three potential drawbacks, and the four conditions and related guidelines for success, as reported here. If the auction, to be successful, a product or service specification must be clear and comprehensive, the purchase must be large enough to provide incentives for providers to participate in the auction, the relevant supply market conditions must exist, and the appropriate institutional infrastructure must be in place. "Hide
by Larry R. Smeltzer, Amelia Carr Source: Business Horizons 6 pages. Publication Date: March 15, 2002. Prod. #: BH073-PDF-ENG
