How it Works
Definition of 'Reverse Auction'
*A type of auction in which sellers bid for the prices at which they are willing to sell their goods and services. In a regular auction, a seller puts up an item and buyers place bids until the close of the auction, at which time the item goes to the highest bidder. In a reverse auction, the buyer puts up a request for a required good or service. Sellers then place bids for the amount they are willing to be paid for the good or service, and at the end of the auction the seller with the lowest amount wins.
In English- Sellers compete to offer you the buyer, the lowest price for what you need. Lets say you need 5lbs of chocolate covered fished sticks with colored stripes. The red stripes, not the blue ones. You post that request on the site and watch. Distributor "A" returns a quote of $7.93, distributor "B" then offers it for $7.48. But wait, distributor "A" is not done, $7.48? He revises his quote to $7.24. You select "A". You saved time and money.