After examining data from several online auctions, we noticed that the low bid was selected only about half thetime. For some product segments, the low bid was rarely selected. Different buyers respond to different selling points. Price is a key metric but so are quality, availability, quantity, warranties, total life cycle costs, service, relationships, and brand. Buyers can procure with more confidence in the prices they receive and will likely enjoy more uniform pricing.
Online pricing serves as a check on the system to prevent aberrant pricing.
But not everything fits the beat them until they break pricing approach. You might reverse-auction services for yard surgery but not for brain surgery. Suppliers get to ship in bulk and concentrate on producing quality products and servicing large customers and distributors. Lower customer acquisition costs Suppliers can discover new buyers at much lower costs as compared to traditional marketing avenues. If customers are already in a centralized market, half the journey is complete since they can be found.