How to bid at consumer-oriented reverse e-procurement platforms

Abstract

Reverse procurement platforms which enable buyers to place requests for proposal online and then offer suppliers the possibility to bid for contracts have been intensely used in a B2B-context for several years. Since about 2004, such platforms have become available to ordinary consumers and are constantly gaining in popularity. Being primarily a tool to increase competition, these platforms generate significant consumer surplus and exert intense price pressure on the suppliers. This raises the question how potential suppliers – many of whom are small and medium-sized enterprises (SME) or even self-employed persons with little auctioning experience – can exploit the potential benefits of the new platforms without becoming victims of phenomena like the winner’s curse. One solution to this problem can be decision support systems which assist the SMEs during the bid preparation phase.