The Fading Reverse Auction —Morgan
IN THIS DAY and age, most of us take it for granted that technology can make a process easier and more efficient. But sometimes it is necessary to take a step back and review if a device is delivering what it was originally designed to do.
Take reverse auctions, for instance. These types of transactions were created with the intention of leveling the playing field among printers. Every print supplier is provided with the same print specifications, turnaround time and distribution details for a particular job. In theory, this levels the playing field between printers and generates the best price.
Sounds sensible, right? Then why are they becoming less popular? What is wrong with the system?
Reverse auctions—once believed to either revolutionize buyer/supplier relationships (if you were in favor of it) or be the demise of the industry (if you were opposed to it)—seem to be quietly slipping away.
In a Print Buyers Online.com Quick Poll survey conducted in May with 70 respondents, 85 percent of print buyers indicated that their companies are not using reverse auctions to award bids to their print suppliers. When compared to the results of earlier polls (conducted in 2005 and 2006) asking the same question, it is clear that reverse auctions are being used by fewer and fewer buying companies.
Our research with print suppliers generated a similar response. In a Quick Poll distributed in May, 48 percent of print supplier respondents said none of their customers were using reverse auctions. As one survey respondent volunteered, “Who has time for this ridiculous process? Where is a printer’s integrity if it keeps backpedaling every half hour until it wins a bid? If I were a print buyer, I would wonder how much I had been taken for in the past.”
With such negative responses, we thought we would share some of our members’ experiences with reverse auctions.