What's new is the Internet's ability to make pricing information available anywhere, to anyone, and at any time, creating a dynamic marketplace in which prices are more fluid than ever. The auctions are a part of Visteon's aggressive companywide initiative to move the bulk of its supply chain to the Internet. Eventually, online bidding may be as ubiquitous as stock quotes and free E-mail, analysts say, and will profoundly change how products move through the supply chain as buyers and sellers interact more directly and more frequently to determine what something is worth at a particular moment. In an auction, one seller entertains bids from multiple companies or individuals and controls the action.
Prices typically move in one direction.
Exchanges involve a neutral party that operates an exchange and sets ground rules for many buyers and sellers, who meet there and pay a fee for each transaction conducted. In the securities markets, for example, the New York Stock Exchange and its peers set rules for trading on their systems. Similarly, exchanges in all sorts of other products are sprouting on the Web, and prices fluctuate according to market conditions. Online bidding, also known as dynamic pricing, is being embraced most often at the end of the supply chain, where companies want to dispose of surplus inventory. Auctions and exchanges yield significant revenue for excess supply or discontinued products.