Online reverse auctions and their role in buyer–supplier relationships

Abstract Despite the move in recent years towards supplier partnerships, buying firms need at times to make use of competitive procurement strategies for certain purchases. This study examines the impact of reverse auctions on buyer–supplier relationships through six case studies, analysing primarily the supplier perspective through participant interviews. The authors identify that there are potential benefits for both parties in a reverse auction, which can offer tendering and transactional cost advantages. For buyers, it offers a competitive procurement process. The effect on relationships will depend on the extent to which buyers employ the auction as a price weapon, or whether it is used primarily as a process improvement tool.