Electronic Reverse Auctions: Changing the balance of power from suppliers to buyers?

This exploratory study investigates whether Electronic Reverse Auctions (ERAs) cause a 'power shift' from suppliers to buyers. It is important to develop greater understanding of this emerging issue in ERA literature in order that procurement professionals can benefit from ERA application. A review of the literature identifies bargaining power determinants, forming the basis of a conceptual model. The research explores the balance of power in sourcing processes that utilize ERAs and evaluates the degree to which the power balance is attributable to ERA. Two contrasting case studies, are developed these suggest that ERAs have the potential to increase the power of buying organizations, relative to suppliers, in the sourcing process.