In a reverse auction, a group of potential suppliers are invited to compete against each other to provide a good or service to a buyer. The buyer publicly posts their project requirements and solicits bids from suppliers. The suppliers then submit their bids, and the buyer chooses the supplier with the lowest bid to provide the goods or services.
Reverse auctions are commonly used in procurement processes in which buyers are looking to purchase large quantities of goods or services, such as in government contracting. By inviting multiple suppliers to bid on a project, buyers can ensure they are getting the best possible price for the goods or services they need. Additionally, reverse auctions can help speed up the procurement process by reducing the need for negotiation between buyers and suppliers.