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Reverse auction. A reverse auction is a type of auction in which the roles of buyer and seller are reversed. In an ordinary auction (also known as a 'forward auction'), buyers compete to obtain goods or services by offering increasingly higher prices. In a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid each other.
A forward auction is the most common type of auction and it consists of one seller, and many potential buyers. This type of auction has been used for centuries, obviously way before the internet has been invented. A forward auction can either be B2B, B2C, or C2C. Four types of forward auctions are the English auction, the Yankee auction, the Dutch auction, and the Free-fall auction.