Features – Auctions
Buyers can create a wide variety of auctions on Procurehere:
- English Auction
- Sealed Bid
- Dutch Auction
The most common type of auction among our customers is the English Reverse Auction, which is where the suppliers bid the price down in as many bids and whenever they like in the duration of the auction.
There are three steps in an Auction process:
English auctions allow bidders to submit pricing in decreasing direction in real-time within a defined start and end time.
Some of the key features on Procurehere’s English auctions are:
- Lump-Sum vs. Line Bids: auctions can be set so bids are placed by totals (lump-sum), and only broken down after the auction, or they can be set so bids are placed by line items in real time.
- Bid with Tax vs. No Tax: you may set the auction to require bidding with tax or without tax.
- Who Keys in Initial Price?
- If the auction is preceded by another event (like a tender), the Auction Creator can set the auction so that the Buyer specifies the initial price; the Suppliers will be required to either confirm or lower the price before the auction commences.
- Alternatively, instead of the Buyer keying in the initial price, the auction can be set so that the Supplier keys in the initial price.
- What Shows on the Auction Console? You can set the auction console to show either:
- Bidder’s names, rank and prices
- Or to hide prices and show names and rank only
- Or to hide prices and names and show rank only
- Start Gate: This is a setting where each supplier cannot view the auction console until they have dropped their price by a specified percentage.
- Specify Minimum Decrements:
- From Own Previous Price: you can set up an auction so that each supplier must lower its price by at least say 10% from its own previous price with each bid.
- From Leading Bid: or you can set up the auction so that each bid must be more than say 15% lower than the leading bid of all suppliers.
- Automatic Time Extensions: The auction can be set to extend its duration automatically place of the last bids. For example, you can set the auction to extend by say 10 minutes every time a new leading bid is placed in the say last minute, for a maximum of say 5 rounds; you can also set the auction such that in each extension, the worst-ranking bidder will be disqualified.
Sealed Bid auction time is the same in all ways to an English auction, except that it hides all bid prices from Buyer during and after the auction. The prices will only be revealed when Buyer’s evaluators open the envelope after the auction.
In a Dutch reverse auction, the Auction Creator specifies a starting price which then rises by a specified increment at specified time intervals, until either a bid is taken by a supplier (first bid wins), or the ceiling price is reached. For example, the bidding starts at MYR 100,000 and increases by RM 100,000 every minute, until one supplier takes the bid, or else it finishes at MYR 600,000 with no bid taken (see image of Auction Hall below).