Group
Assignment
On
Direct and Interactive
Communication
Submitted to: Submitted by:
Dr. V.Rao Divya Aggarwal
Priyank Sharma
Anuj Kamboj
What is E-Auction?
E-Auction is an online negotiation tool. The supplier with the lowest bid will win the auction.
However, it is important to note that business will not always be awarded based on lowest bids only,
quality and service level are also important selection criteria.
The non-price factors will - in most cases - is incorporated in the e-Auction so the winner of the e-
Auction will also win at least part of the business.
E-Auctions are being used by councils to secure better contract terms and prices for the goods and services
they buy. An e-auction allows councils to set up a scheduled event where companies can bid against each other
to win the council’s business. Understandably, this can give councils significant savings on price when
compared to previous contracts, but the process of running an e-auction can be complicated and councils using
e-auction technology need to be sure that the e-auction process has been backed up with a well run
procurement process.
The online auction is a process where the items are sold on the internet, all the auctions are not same
and there are also some risks involved in the online auctions. It is also very important for the people
who want to participate in the online auctions to make sure the sort of the auction and the rules, rights
and responsibilities the participants have. The participants should take appropriate steps to minimize
the risks.
There are different types of the online auctions which are given below:
Marketplace online auctions:
In these virtual markets a business sets up a website in which the buyers and the sellers from different
groups deals directly with each other and make the market work. The business also gives the rules and
regulations for the process of auction. The important thing is that business running the website is not
directly involved in the auction process and is not an agent for the seller.
Traditional auctions:
In this case, the auctioneer acts on behalf of the seller of the goods. Traditional online auctions operate
in the same way as in the real world but instead of interested buyers gathering together in person, an
online auction house uses a website to create a virtual auction.
Auctions conducted by businesses:
In this the business running the websites offer their own products for the auctions and it has many
forms like
Low bid auctions: In this the participant with lowest unique bid wins the auction.
High bid auctions: The highest bid wins the auction.
Beat the clock auctions: In this type of auction each new bid increases the auction duration,
with the highest bidder at the end of the auction winning.
Reverse auctions: The role of the buyer and seller are reversed where there are more number
of sellers and less number of buyers, sellers compete for the sale of their product.
Key things to look for and think about
Typical features of available auction solutions include:
Buyer Features
secure environment for setting up business rules, approving supplier participation and
monitoring events
ability for buyers to upload images, specifications and other documents
re-usable auction facility which permits editing and reposting of saved auctions as new
auctions
customized buyer screen
analysis tools for bid evaluation
end of auction management information reporting
audit trail
Supplier Features:
facility to upload product specifications and images
customized supplier screen
event log showing a minute by minute bidding activity with a graph
automated award notification to the successful bidder
Effort and Cost
The main effort involved in carrying out each online reverse auction is usually focused on the set up
activities:
preparing detailed product specification – it is very important to produce a clear product or
service specification as it will help suppliers in bidding and also make the post-auction
evaluation more straightforward.
recruiting suppliers – Some suppliers are not experienced in taking part in electronic reverse
auctions and therefore may not be immediately willing to join in. Reverse auction service
providers may be able to help with supplier recruitment.
training suppliers in using the software/website – reverse auction service providers will provide
training assistance. This may be included in the price.
There are a number of cost options available:
Software license purchase - the auction software is bought and installed on the council’s server.
The council can then use the software and organize an unlimited number of events at no extra
cost. The additional cost involves consulting services required to set up and manage the first
auctions and train users to be able to manage auctions independently in future.
Pay as you go – the buyer can purchase individual events from a third party auction provider.
The price will depend on the number of suppliers taking part in the auction.
Multiply – the buying organization can purchase a number of auctions as a package for a set
price. The package usually includes support and training for both users and suppliers.
Commission on the realized savings, where the vendor takes a percentage of the savings
realized by the buyer on the agreed contract.
Supplier pays – in some cases, the suppliers of the product or service to be auctioned pay to be
able to take part in the auction on a “no win, no fee” basis.
Other secondary Auctions Types:
1. Reverse English E-Auction - The Reverse English E-Auction is the most commonly used E-
Auction type. Suppliers submit decreasing price bids until no further bids are received. In this format,
each supplier is aware of the best bid (i.e. lowest bid) and/or their ranking compared to their
competitors. Trading Partners recommends Reverse English E-Auctions when there is a healthy
number of participating suppliers and open competition will deliver the best result.
2.Reverse Clock E-Auction - In a Reverse Clock E-Auction (also referred to as Reverse Japanese) the
Client is in control of the price decrements, and suppliers accept or decline at each price level. It is a
straight forward and fast paced E-Auction for both suppliers and Clients.
3.Multi-Directional E-Auction - In a Multi-Directional E-Auction the supplier bids downward on
certain items and upward on others. For example, a supplier might negotiate the item price downward
and negotiate a rebate percentage upward (e.g. to help with promotional or advertising costs). Trading
Partners recommends Multi-Directional E-Auctions when the Client wants to take into account any
cash back, rebate, or other value-adds they may receive from a participating supplier.
4. Weighted E-Auction - With this method, suppliers are scored according to non-price factors, such
as quality, location, ISO certification or delivery terms. The supplier’s overall position in the E-
Auction is adjusted according to a combination of both price and non-price factors. Suppliers cannot
modify any non-price attributes. Trading Partners recommends weighted E-Auctions when there are
significant differences in non-negotiable criteria among suppliers, and these differences affect the
Clients' preferences (i.e. the Client is prepared to pay more for a higher-quality offering).
5. Multi-Attribute E-Auction- As with weighted E-Auctions, suppliers are rated on both their price
and non-price factors. However, in a multi-attribute E-Auction, suppliers are allowed to modify non-
price factors during the E-Auction. For example, they might shorten lead times in order to improve
their overall position. Trading Partners recommends Multi-Attribute E-Auctions when the Client is
prepared to negotiate on certain non-price criteria
6. Chinese Auction: The other name of Chinese auction is tricky tray and pick-a-price. It is usually
held at charity or fund raising events. The bidders buy tickets and the chance of winning is
proportional to the number of tickets purchased. The origin of Chinese bidding is still ambiguous.
7. Dutch Auction:
In this type of bidding, the auctioneer declares a high price for the product or service and
subsequently, it is lowered depending on whether the participants are willing to pay the pre determined
amount.
8. Sealed-bid first price auction: In this type of bidding, all the bidders simultaneously submit their
bidding amount. Know bidder knows the bidding amount of his/her competitor. The one who bids the
highest amount gets the product/service.
9. Sealed-bid second-price auction: Also known as Vickery auction. It is exactly similar to sealed bid
first price auction, except that the highest bidder pays the second highest amount and not the highest
bid. This is the bidding system used by eBay.
10. All-pay auction: In this auction type all the bidders have to pay their bidding amount irrespective
of the fact that they have won or not.
11. Double auction - In the process of bidding the price proposals are received from the buyer and the
seller. Such action enables you to balance the cost. These trades are appropriate in format of electronic
exchanges
12. Usual (absolute) auction – has no a reserved or minimum price, the product is sold to the buyer
for the maximum bid price.
13. Public auction – for all members and visitors it is available the current maximum bet and the
history of bets; no restrictions except guarantee the solvency are not imposed on the participants.
14. Private (salted-bid) auction – the bet is accepted during a strictly limited time, and the party can
make only one bet and cannot find out the size and number of bids of other participants; at the end of a
15. Silent auction- who made the bet, but he can find out what the current maximum bet is a kind of
private auction, the participant does not know specified period a winner or winners are determined
16. Auction with a minimum price – the seller puts the goods and establishes a minimum starting
sales price; buyers also know only the size of a minimum price during the bidding process.
17. Auction with a reserved price – differs from the auction with a minimum price that the bidders
are aware of the established minimum price, but is unaware of its value; if in the process of trades the
lowest price is not reached, the product is not sold.
Auction Procedure on EBay
In general, items on eBay are being sold in two basic ways:
Fixed price items are easy to identify because they have a "Buy It Now" button with a price
listed next to it. You can buy this kind of item simply by clicking the "Buy It Now" button.
You will pay the price listed next to the button.
Auction items have a "Place Bid" button next to a box for entering bids and show a "current
bid" price. Auction items are open to bids for a predetermined amount of time. When time is
up, the item is declared "sold" to the highest bidder.
A few items have both kinds of buttons and show two prices at once. Items like this are for
sale both ways. If nobody uses the "Buy It Now" button, the item goes to the highest bidder
when time is up.
How to Bid (What You MUST Know)
If an item you're interested in has a "Place Bid" button (meaning that it's an auction item), you'll have
to bid on and "win" it in order to buy it. To do so, enter a dollar value into the box (your bid) and click
"Place Bid."
Before you decide to bid, however, but there are some things you should know:
eBay auctions accept bids only for a specific amount of time. In a traditional non-eBay
auction, bidders frantically place competing bids. When bidding slows to nothing, the
auctioneer pounds the gavel and the item is sold. On eBay, auctions are open to bids for
exactly 1, 3, 5, 7, or 10 days. When time is up, the high bidder wins, even if people are still
frantically bidding.
You must place a bid that is higher than the current bid. Below the bidding box, you'll see
the text "Enter (some amount) or more." This amount is the current minimum bid; you must
enter at least this amount if you want to bid.
You may pay less than your bid if you win. When you win an auction you always actually
pay only a small amount more than the next highest bid-even if your bid was thousands of
dollars more.
If your bid wins, you must buy. Your bid on an auction is a legally binding contract. If when
time runs out your bid is the highest, you have purchased the item and must pay the seller for
it.
Use 1-Click Bid to place small bids. In the last 15 minutes of an auction you've bid on in the
past, you can instantly bid one increment higher than the current bid by clicking the "1-Click
Bid" button.
Other bidders may be using the automatic bidding system. Because many shoppers use
eBay's automatic bidding system, eBay auctions may not behave in ways that make sense to
you. The good news is that you can use the automatic bidding system, too—as you'll see on the
following page.
Technically, this is all you need to know to bid on eBay auction items. Learning about eBay's
automatic bidding system, however, can reduce your frustration and improve your bidding success.
Read on to learn how to use it.
http://ebay.about.com/od/gettingstarted/a/gs_bids.htm
http://justinhermen.blogspot.com/2011/03/online-auction-types.html
http://en.wikipedia.org/wiki/Auction
