Reverse Auctions as a Way to Cut Costs and Boost Business in a Down Economy

>website on some of the reverse auction websites, is
their sales pitch as to why you should choose them.
These are tough economic times when we all want toMost reverse auction websites also have a rating
stretch our spending dollars or generate moresystem that tells you about the experience others
business. Reverse auctions can get you morehave had using a given contractor.
competitive bids for the work you want done. As aYou observe the bidding and assess who is offering
supplier, you can generate more business opportunitiesthe best combination of factors — price,
by signing up with one or more reverse auction sites.experience, qualifications, reputation, lead time, where
Here you are, wondering how you're going to get thelocated and so on. The system will close the bidding at
money together to have the gutters fixed in thisthe date and time you specified, or, generally, you can
difficult economy (or get the roof fixed, or whatever itclose it early if you want to.
is you need done). You don't want to spend more thanA good reverse auction website will make sure you
you have to, but you need to get it done before theget several bids. First, the site will notify contractors
summer rains come (or whatever . . . ). And it reallywho have registered in the field that you need work
doesn't matter whether it's a down economy or adone in. Second, if there aren't enough contractors
rip-roaring period of economic growth — we allregistered in that field, the website will search out
like a bargain. It's just that, at present, we're moreproviders in the community and invite them to bid on
inclined to search out good value rather than just takeyour project.
the first thing that comes along.You won't know the identity of the bidders, since the
As long as you're not in an immediate emergency, it'srules of the reverse auction sites are that both the
worth taking the time to get several bids on yourcustomer and the bidder or provider remain
project. The trouble with trying to do that yourself byanonymous. This allows customers to review bids
phone is that each person you call is out to convincewithout being pressured into contacting the bidders.
you that they're the best and that you should sign upGenerally there is a very successful outcome as long
with them right now. And each one has a good storyas you adequately describe what is needed.
to tell — or they wouldn't still be in business.Both customer and supplier need to recognize that
So how do you get qualified bids without being subjectthere is a legal contract once the customer has
to the pressure of individual sales people? Reverseaccepted a bid, and both sides are obligated to live up
auctions are a good way to go. There are a numberto their end of the bargain. Reverse auction sites
of competent reverse auction sites that you can find,normally are not involved in that contract — they
each with its own individual characteristics, but eachprovide a market place for customers and suppliers to
basically requiring you to:work together, but do not participate in the deal, and
Register as a client;are not responsible for the outcome.
Describe your project in enough detail for a serviceFor service providers, it's a good idea to register with
provider to understand what's needed and be able toone or more reverse auction sites, particularly in these
bid on it;difficult times. By registering in all the areas of interest
Decide how long you'll keep the bidding open;to you that are listed on the site, and in the location(s)
Post the project on the reverse auction website;that you cover, you will automatically be notified when
Sit back and wait for the service providers to bid.something comes up that you could bid on. And by
Typically, each provider will provide a quote in dollars,being able to see what others are offering, you can
and some description of their qualifications. The quotefine-tune your bid by emphasizing your special skills,
is the financial component. Their description of theirexperience etc. to get the best chance of winning the
resources, which can be enhanced by an internaljob.