By now everyone knows how eBay works. You list an item youre trying to sell, and buyers place bids on it. After a predetermined length of time (commonly seven days), the highest bidder wins and gets to pay that much money for the item. Thats great for sellers, but what about buyers? Wouldnt it be better if sellers competed for a buyers business, instead of the other way around? Thats where reverse online auctions come in.

Reverse online auctions work in the opposite way from eBay- style auctions. A buyer lists the item hes looking for, and sellers compete for his business by offering their lowest possible prices. In effect, the buyer is playing hard-to-get. Rather than running to eBay and flinging himself at the seller -- Please sell it to me! Look how much Ill pay for it! -- the buyer plays it cool, letting the sellers come to him.

As a result, buyers in reverse online auctions usually pay less than people participating in regular auctions. A DVD thats only worth $12 might have its price driven up to $20 or more on eBay, due to buyers competing with each other for the right to buy it. With a reverse Internet auction, that price will stay low, because buyers arent getting in each others way, artificially driving up the price. Instead, the sellers are driving DOWN the price because they want your business.

There are two ways of running an auction online: open and closed. In an open auction, all the bidders know where they stand in the bidding, i.e., whether theyve been outbid. In a closed auction, each bidder only knows his own bid. Therefore, he must put forth his very best offer at once, since he wont be able to make a better one in response to someone elses bid.

Sellers know that e-procurement -- where items are bought, paid for and sold over the Internet -- is more lucrative than traditional brick-and-mortar stores simply because there are fewer overhead costs. So its in their best interest to attract new online customers, and they know one way to do that is to participate in reverse auctions on the Internet. Connect on oltiby.com and take advantage of this new way of making business.