Page "Economies of scale" Paragraph 8

The literature assumed that due to the competitive nature of reverse auction, and in order to compensate for lower prices and lower margins, suppliers seek higher volumes to maintain or increase the total revenue.

Buyers, in turn, benefit from the lower transaction costs and economies of scale that result from larger volumes.

In part as a result, numerous studies have indicated that the procurement volume must be sufficiently high to provide sufficient profits to attract enough suppliers, and provide buyers with enough savings to cover their additional costs.