If there is a negotiating variant that allows to capture immediate gains, electronic auction is the one! No wonder that it is used to sell art or to buy commodities.
Electronic auctions have several direct and indirect benefits:
1. Lower purchase costs. The bidding winner is forced to place another bid to ensure that we continues ahead. The increase competition comes directly from the quickness of the internet. In paper based bids, there is no pratical way to manage dozes or hundreds of bids. By using the electronic auctions we can expect immediate average saving of 5 to 10 percent.
1. Lower purchase costs. The bidding winner is forced to place another bid to ensure that we continues ahead. The increase competition comes directly from the quickness of the internet. In paper based bids, there is no pratical way to manage dozes or hundreds of bids. By using the electronic auctions we can expect immediate average saving of 5 to 10 percent.
2. Increase purchase speed. The usual process of bidding (email, phone) is slow and it is unstructured. It does not provide a good platform to consolidate bids in a faster way.
3. Solve monopoly, oligopolies (market inefficiencies). Different types of auctions solve different problems.Mixing technology with auctions theory you can break monopolies or oligopolies by using different auctions flavors like American or Japanese.
What it the link between Auctions and the previous post about RFP ?
When entering an auction you must understand that you are not receiving a full blown proposal. Actually what you receive is just, is a vast majority of times, a price. That means you have the heavy load and responsibility of defining precisely the products or services you are purchasing.
When entering an auction you must understand that you are not receiving a full blown proposal. Actually what you receive is just, is a vast majority of times, a price. That means you have the heavy load and responsibility of defining precisely the products or services you are purchasing.
That time and effort does pay out. By defining exactly what you need the message is clear across all the tenders. Because the tenders only can bid a short number of variables and cannot bid ad-hoc conditions, they will connect to you to clarify grey areas. That leads to well defined scopes of products and services.
For tenders that means their risk is lowered, because the scope is usually better defined in an electronic auction process. And if the risk is lower, they can do better pricing.
Call to Actions
Select a standard product or service that you company purchase and that is not a core product / service.
For example if you are a car repair shop, you may want to receive bids for telecommunications.
For example if you are a car repair shop, you may want to receive bids for telecommunications.
If you are an office law, maybe you want to receive bids regarding insurances.
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