Reverse Auctions as a Way to Get Your Projects Done and Save

Many people need to get projects done, and would like to have an
efficient way of approaching the selection of suppliers. You might be
a small business looking for a new bookkeeper or a landscaping
contractor, or a private individual needing to get your roof repaired
or your pool resurfaced ? or needing any number of other services.

Among the normal ways of choosing a supplier is to research the
yellow pages or do a Google search. You turn up a number of
possibilities and talk to several of them ? at least, until someone
convinces you on the first or second call that they have exactly what
you need, and you sign up with them.

Some people go to Craig’s List and take their chances there. Others
will use ServiceMagic or a similar listing service to get the names
of a few recommended contractors.

Each of these processes has its own advantages and disadvantages. The
quicker the process, the less likely it is to yield reliable and
beneficial results. You need to be willing to put in some effort to
clearly describe your requirements and any special circumstances
surrounding the project, and to indicate (e.g. by quoting your ZIP
code) where the job is located. Often it is very useful to include
photos or sketches to clarify what needs to be done.

There are other disadvantages to the approach of serially contacting
possible suppliers. You know relatively little about the suppliers
you are calling, and you may easily miss some of the best. You are
exposed to the sales pitch of each potential supplier you contact,
often with the request that they come out and see the job. Frequently
this isn’t required, as they know enough from being in the business
you’re inquiring about to quote without visiting you. But if they
visit, there is a better understanding of what sort of financial
bracket you are in, and they can shade their price accordingly and
try to close the sale immediately.

If you list your project on a reverse auction site, you achieve
several things:

You maintain your privacy;

You will normally get more people reviewing your project than if you
just call around;

You’ll initiate a competition between suppliers for your work;

Each supplier will have to respond to the specification or
description you put in of your project;

Each supplier will know what the others are bidding and what
qualifications they offer, so the motivation is there to match
qualifications and improve price, or to reduce price to make up for
lesser qualifications on paper;

You end up with a clear contract spelled out.

A good reverse auction site will help you find potential suppliers
who will bid on the job if the description is sufficiently clear, or
help you clarify the description through question-and-answer
exchanges. Some websites will allow the supplier to identify him- or
herself, assuming that you have the motivation not to reveal your
identity. Most customers recognize that calling the potential
supplier exposes them to the pressure of a direct sales pitch, and
many customers are trying to avoid this.

These processes will allow you to more thoroughly evaluate the offers
that you receive. If a supplier is to quote and enter into a legally
binding contract, he or she must be reasonably confident that they
can do the job successfully for the amount bid. So they will be
careful and precise in the way they put together their bid, while at
the same time recognizing that they need to be competitive. Having
the bids visible to all suppliers allows a competent supplier to
establish the initial benchmark of quality, price and delivery that
others need to match or beat. Subsequent suppliers need to improve on
that benchmark ? whether in quality, price or delivery time.

The quality may be best judged by the reputation the supplier has
earned on the website: What sort of ratings have they been getting?
How do they compare with others? If their rating has not built up
much yet, what does their own website tell you about them?

Your job as a customer is to make sure you are going into business
with a competent and honest supplier ? and to let others know, when
the job is complete, how they performed. The supplier’s job is both
to perform as well as possible, and to let others know how well you
kept your side of the bargain ? did you pay on time? Did you stick
with the description and scope of work agreed on? Were you easy to
work with as far as access and timing were concerned? And so on.

Reverse auctions can help you get through your list of projects in a
satisfying, low pressure and professional way. Give it a try!

Patrick Hesselmann is a co-founder of FlatDoor, Inc., and its
With hundreds of categories and locations, it is the ideal site for
customers to post services wanted, and for suppliers to bid on them.
Post and bit free; a small fee is charged to the successful bidder.