How a steel reverse auction works

In a reverse auction the buyer floats one requirement and sellers compete downwards on it. Instead of calling ten dealers and collecting quotes on WhatsApp in ten different formats, you get every verified seller's best landed rate on one screen, in real time.

Step by step

Step	What happens
1. Float the inquiry	Choose the category, IS grade, sizes and quantities, preferred makes, delivery place, timeline and payment terms. Quantity can be fixed or flexible.
2. Set the auction rules	Closing time, minimum decrement between bids, and what sellers may see - nothing (sealed), only the lowest rate, or the top few ranks.
3. Sellers bid	KYC-verified sellers quote and improve their rates live. Each bid must beat the previous one by at least the decrement.
4. Soft close	A bid in the last minute extends the closing time, so nobody can win by sniping the clock.
5. Compare	You watch the L1 to L4 ranking on landed cost - basic rate, extras, freight and GST worked in - and download the comparison as Excel or PDF.
6. Award	Award L1 or any ranked bidder. If it is not the lowest, you record a reason - useful for audits.
7. Deal note	A deal note with GST, MTC and weighment terms is generated for both sides, and contact details are shared.

Why buyers use it

Real competition: sellers see they must beat a live rate, not a guess.
Like-for-like comparison: every quote is on the same landed basis.
Audit trail: who bid what, when, and why the award was made.
Privacy: no seller sees another firm's identity or contact details.
Verified counterparties: GSTIN, PAN and bank proof checked before trading.

Why sellers use it

Genuine requirements from verified buyers - no brokers or time-wasters.
A clear view of where your rate stands while the auction is live.
Forward auctions too: sell ready stock, surplus lots and scrap to the highest bidder (H1).

Good practice for buyers

Write the specification completely - grade, standard, sizes, makes, test certificate.
State freight, unloading and payment terms so every quote includes them.
Set a realistic closing time so sellers can check stock and freight.
Use a sensible minimum decrement - too small invites endless tiny bids.

Float your first inquiry - free See the live marketplace

Frequently asked questions

What is a reverse auction in steel buying?

An auction where one buyer floats a requirement and several sellers bid downwards; the lowest acceptable landed rate usually wins.

What is L1 in a reverse auction?

L1 is the lowest bid, L2 the second lowest, and so on. On Indian Steel Portal ranks are calculated on landed cost, including freight and GST.

Do I have to award the lowest bidder?

No. You can award any ranked bidder; if it is not L1, you record the reason.

What is a soft close?

If a bid arrives in the last minute, the closing time is extended, so every seller has a fair chance to respond.

Can sellers see each other's bids?

Only as much as the buyer allows - nothing, just the lowest rate, or the top few ranks. Identities and contact details stay hidden.

Last updated 8 October 2026.