Auctions overview

Auctions provide a structured way to source high-cost or high-volume purchases while encouraging competitive supplier participation. Auctions simplify negotiations, drive competitive pricing, and improve supplier engagement by allowing suppliers to bid for your business in real time.

Ready to run auctions?: If you are interested in using auctions, contact your Fairmarkit Customer Success Manager. You'll need to specify which auction types you want to use.

How do auctions work?

This depends on the type of auction you select. You have three options that have working variations.

Dutch auction

The auction price starts low and gradually increases. The first supplier to accept the price wins.

English (classic) auction

Suppliers compete by submitting lower prices. At the end of the event, the supplier with the lowest bid wins. This is the original reverse auction experience.

Japanese auction

The auction starts at the highest price you'll pay and decreases gradually over time. At each decrease, suppliers can choose to stay or leave. The last supplier remaining wins.

When to use an auction

Auctions are ideal when:

• You're purchasing standardized items or services (e.g., office supplies, raw materials, transportation).

• There’s a high savings opportunity or a high-value purchase.

• You’re working with vetted suppliers who are ready to compete.

When to avoid auctions

Avoid auctions for unique or highly customized products or services, as they may not generate meaningful competition.

Before your auction

To set your auction up for success:

• Prepare suppliers: Confirm that selected suppliers are familiar with the auction process and ready to participate.

• Give prep time: Ensure suppliers have time to respond and secure internal approvals for competitive bids.

• Use strategically: Use auction strategically. For example, after running a request for quote (RFQ) event, you can invite a shortlist of suppliers to participate in an auction to achieve the best price.

Basic workflow

• Create an auction: Add item details, invite suppliers, and set auction settings.

• Run the auction: Depending on the auction type, suppliers will submit bids or choose to accept or decline the price.

• Award the auction: Review supplier responses after the event closes and select the winner.