This paper analyzes and electronic procurement (e-procurement) process between a manufacturer and N-supplier in the e-market. We proof that using the general contract based on auction theory, i. e. the wholesale price contract, would not achieve the coordination of channel composed of the manufacturer and the winning supplier. The paper designs a contract mechanism, i. e. the side payment price-restricted contract based on auction theory, which not only ensures Pareto optimal solutions for both, but also coordinates the supply chain. A numerical experiment is provided to compare the performance of different auction mechanisms and to reinforce key managerial insights generated through analysis.