What is an online auction site

E-businessOnline auction shopping

The auctioneer has other tasks in the preparation phase. Among other things, clear and comprehensive specifications are necessary. Suppliers need to know what they are bidding for and buyers what they are getting. The starting point is minimum levels, also called satisfaction criteria or must targets. They are the entry barrier to the online auction. Only those who fulfill them can participate. Once a supplier has cleared this hurdle, only the price, the so-called optimization criterion or the maximum target, such as a combination of price and quality requirements, decide on the award. Compensations between these criteria, for example better quality for a higher price, are not permitted in “traditional” online auctions.

Newer type of online auctions, such as multi-attribute auctions, operate differently in this regard. They are based on the relative evaluation of different characteristics. The auctioneer should keep the number of order items manageable in order not to overwhelm the bidders with the dynamics of the auction process. Several dozen individual articles or positions unsettle the participants. If you still want to hire more items, you should bundle them into manageable shopping baskets that the supplier can then bid on.

Carry out preparatory test auctions

The auctioneer also clarifies communication-related details in the preparation phase. Auction details, data management and the hardware and software equipment of the suppliers must be specified and auction training must be carried out. In order to offer all participants the same opportunities, it is advisable to carry out preparatory test auctions in the case of a new launch.

The placement of phantom bids, both by the buyer and the supplier, prevent technical measures and documented codes of conduct. The auction rules have to be confirmed anew at every auction, this is the only way to build a stable auction reputation and possibly even achieve a higher degree of objectivity than with traditional negotiations. It is important that the procedure required for the selected auction type and the transparency in the auction implementation phase are consistently adhered to. Regardless of the type of auction, it must be ensured that all participants have real-time access to the auction information and can submit their bids in good time even in the event of technical problems.