What is the difference between Enquiry, Reverse Auction, and Forward Auction?

Modified on Sat, 4 Oct at 4:35 PM

Each event type is a distinct procurement method designed for a specific purpose:

1. Enquiry (RFQ - Request for Quotation)

Purpose: To gather information, preliminary pricing, and vendor proposals.
Process: It is a non-binding process. There is no real-time bidding.
Outcome: The buyer collects and evaluates submissions and typically awards the business offline after a thorough review.

2. Reverse Auction

Purpose: To achieve the lowest possible price from a pool of qualified suppliers.
Process: This is a live, competitive bidding event where multiple suppliers bid for a contract.
Outcome: Prices decrease as suppliers compete. This is an effective tool for cost reduction.

3. Forward Auction

Purpose: To achieve the highest possible price for an item or service.
Process: This is a live, competitive bidding event where multiple buyers bid against each other.
Outcome: Prices increase as buyers compete to win the item. This is commonly used for selling surplus goods or liquidating assets.