# Dutch auction

A Dutch auction is a fast-paced auction format designed to encourage quick supplier decisions. Dutch auctions are designed to accelerate sourcing by rewarding fast supplier decision-making. Buyers can configure **three distinct modes** to suit different competitive strategies and award preferences:

**1. Single Winner (Default)**

The original Dutch auction format is the "Single Winner" mode. The auction starts at a low price that increases over time. The **first supplier to accept the current price wins**, and the auction ends immediately. This fast-paced mode is ideal when you want to award quickly and incentivize aggressive supplier participation.

**2. Multiple Winners**

In this mode, when one supplier accepts the current price, **the auction does not end**. Instead, **all other suppliers are notified and given the opportunity to accept the same price**. This allows buyers to capture broader supplier engagement while maintaining price competitiveness. It’s especially useful when you’re sourcing from a panel of suppliers and want to secure multiple awards at the same threshold.

**3. Run-to-End**

The "Run-to-End" mode allows suppliers to **individually accept prices as they increase** — but the auction **continues running until the ceiling price is reached or the scheduled close time**. The auction does **not end when a price is accepted**. Instead, all accepted prices are collected, and the buyer can review and determine award allocations after the event concludes. This mode gives buyers **maximum flexibility** to assess market interest and optimize award decisions across multiple criteria (e.g., price, capacity, risk).

### How Dutch auctions work <a href="#howdutchauctionswork" id="howdutchauctionswork"></a>

#### Start auction at a low price

Create your auction by adding line items and inviting suppliers. Set an initial price below the expected cost (e.g., $100) and define how much and how often the price will increase (e.g., 2% every 2 minutes).

#### Run auction with price increases

As the auction runs, the price automatically increases at the intervals you’ve set. Suppliers can monitor the auction and decide when to accept the price.

#### Suppliers accept as price increases

At each price increase, suppliers can choose to accept or wait. What happens next depends on the auction mode selected:

* In **Single Winner** mode, the **first supplier to accept the current price wins** the auction, which ends immediately.
* In **Multiple Winners** mode, once a supplier accepts a price, the **auction remains open**, allowing other suppliers to also accept that price before it closes.
* In **Run-to-End** mode, suppliers can **accept prices individually as they rise**, and the auction **continues until the ceiling price is reached or the event ends**. Afterward, you can review all accepted bids and determine award allocations.

Once accepted, suppliers will need to finalize their bid, after which you can proceed with awarding.

### Get started <a href="#getstarted" id="getstarted"></a>

* [Create a Dutch auction](https://docs.fairmarkit.com/buyers/auctions/dutch-auction/create-a-dutch-auction)
* [Edit a Dutch auction](https://docs.fairmarkit.com/buyers/auctions/dutch-auction/edit-a-dutch-auction)
* [Review and award a Dutch auction](https://docs.fairmarkit.com/buyers/auctions/dutch-auction/review-and-award-a-dutch-auction)

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