Reverse auctions: friend or foe?(use of e-marketplaces in the corrugated box industry)

Official Board Markets, April, 2002 by Nocero, John

The debut of e-marketplaces seemed to promise corrugated box makers a new outlet for extending business to their suppliers. However, several years have passed since their inception and converters are wondering if the process is stimulating the industry. Or, are those who are participating just spinning their wheels?

A HOT TOPIC--There are many reverse auctions available on the World Wide Web, but they generally all work in the same fashion. First, the buyer chooses his desired specifications, which are then sent to the appropriate vendors that are registered with the site. Then, customers compare the offers and choose the lowest bid, or what they feel is the best offer. Sometimes, suppliers are forced to lower their offers in response to their competition...