Great! You have decided that you are going to save time and money by running a reverse auction to negotiate. One of the decisions you will need to make is which format of reverse auction will work best for you.
There are several different types to choose from, each one has strengths and weaknesses which you should consider. I am going to focus on the three types which Market Dojo supports – Ranked, Open and Japanese. Both Ranked and Open auctions can also be referred to as ‘Reverse English Auctions’.
In a Ranked Auction participants see their position for each Lot relative to the other participants. Generally it is the most popular auction type as it works for the majority of situations. This is the default option in Market Dojo.
What a participant sees in a Market Dojo Ranked Auction
A Ranked Auction promotes a very close auction when you have a number of participants on a similar price level.
In an Open Auction participants see the Lead Bid per Lot and can only submit a bid that beats it.
What a participant sees in a Market Dojo Open auction
For each Lot, a Bid Level, which begins at a level you choose, is shown to all the participants. Each participant must either Accept or Decline the Bid Level within a set time period, e.g. two minutes. Once accepted and the time expires, the price drops by a specified amount and the participants must repeat the process. It continues in this fashion until the participant declines the Bid Level or is timed out.
What a Participant sees in a Market Dojo Japanese Auction
I hope this overview of different reverse auction types is informative, let me know what you think in the comments below.