The use of bundling in B2B online reverse auctions

In industrial purchasing a request for quotation (RFQ) can consist of a single item, but is most often composed of two or more products and/or services bundled together. While such bundles are used in offline purchase negotiations, their criticality is heightened in online auctions due to their usual short duration and constrained bidding environment. Despite this importance, little systematic discussion or evaluation has taken place concerning bundling practice, especially as it relates to the individual items included in the bundle, the overall bundle composition, and the resulting supply base and ultimate bundle performance. This study investigates these issues by developing a conceptual model and testing it with a large-scale survey completed by purchasing professionals practicing bundling in B2B online auctions. Results indicate that crafting a more homogeneous bundle is most important in achieving a successful outcome. Furthermore, more complex or difficult-to-specify items do not impact perceived bundle performance, but do influence the supply base that is willing and able to bid on the business. (C) 2007 Elsevier B.V. All rights reserved.