My company has a European customer. We provide him all the lights in the factory area and have been working for many years. We always get the order one by one, with a single order amount not exceeding 100,000 euros. But this time our offer is for the whole year, with an amount of more than 500,000 euros. After the quotation, the customer accepted it. But the customer asked us to take part in their Reverse Auction on the web. He also told us not to be nervous. The price will not change, and the terms are also the terms of the offer. But the contract will not take effect before this procedure. Please give a general introduction to the Reverse auction so that we can prepare in a targeted manner.
The Reverse auction is dominated by the buyer. The buyer gives a detailed specification of the goods. Then the supplier bids in turn, and finally the lowest bidder wins the bid. This is a typical bidding process.
Generally, the buyer makes an inquiry with the supplier. After the specific product model, performance and indicators are confirmed, the supplier will quote according to the buyer’s request. Finally, after the settlement of the price, the buyer will tell the supplier to follow their procedure. To have a fair competition, the buyer will require all orders exceeding a certain amount of money to confirm the final price through Reverse Auction.
The E-Reverse Auction is online. The buyer notifies suppliers of the user name and password of entering the bidding website, also the time and duration. After logging in, the highest unit price that suppliers can enter is the price that was previously confirmed. With the requirements of the site, it can only be reduced, such as 0.5% per time, but cannot be increased. If only one supplier attends and does not reduce the price from the start, Reverse Auction will end at the initial price. If multiple suppliers want to get the order, they will start price competition. Then, the lowest price will win the bid. In fact, this is a process of online bidding.
In some countries, large-scale procurement projects require bidding. Your customers have purchased more than 500,000 euros this time. So, this order must be through their online bidding system, which is fairer.
Participating in competitive auctions is not cumbersome. However, it is recommended that you take a look at the website before you attend and familiarize yourself with the operation. Login operations are not complex. There will be many guidance on the website to help you understand the process. Generally speaking, if you get the invitation to this bid, there is a possibility of a deal. Thus, don’t be nervous.
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