Developing trust-based relationships in online procurement auctions

This chapter discusses the challenges involved with developing trust and commitment in online procurement auctions. Online procurement auctions, otherwise known as e-auctions, are becoming increasingly more popular for conducting business-to-business transactions. However, many studies suggest that the success rate for e-auctions is down considerably. This may be due, in large part, to the absence of trust between the buyer/seller in this virtual arena. This chapter summarizes the current literature on trust and collaboration in the e-auction supply chain and discusses the processes in place that may contribute to the lack of trust between parties. Viewpoints of the buyer and seller are presented. Common issues are identified and the challenges associated with creating trust and fairness in the e-auction environment are revealed. Proactive strategies must be in place in order for stakeholders to maintain trust in this environment and to gain benefits from this virtual supply chain process. Future areas of study in this area are critical to its success.