As the on-screen action heats up, loud whoops and cheers punctuate the air. This group isn't watching a horse race, election returns or a good day on the stock market. This is an assemblage of federal procurement officials, and they've come to see the U.S. Postal Service lease 5,000 trucks over the Internet via a reverse auction. It represents some relatively new territory. When this is translated to the Internet, it becomes eBay-style bidding.
Reverse auctions work the other way around.
A single buyer solicits bids from suppliers of a product. Those suppliers then bid down to see who is willing to sell at the lowest price. Reverse auctions first came on the scene in the private sector several years ago. Since reverse auctions are completely driven by sellers who will determine how low the market can go, buyers can sit back and watch prices fall. And sometimes they fall very, very low.