Maximize your value apart from savings – How to boost e-auction savings

eAuctions can deliver continuous and meaningful savings and this has been proved time and again since the 21st century with an average savings rate of 12.54%. But you have to note that such savings don’t just happen as the consequences differ according to how the events are run. If you wish to capture the best savings, you would have to watchfully select events, prepare for them and also execute them.

It is needless to mention that savings matter a lot. You are not only judged on them but you also will be probably compensated on the savings which you offer to the organization. The Finance and CFO are always looking forward to your procurement team to assist the bottom-line. Every year when there is the push to meet savings target, the highest priority is to deliver value to customers. Remember that your customers are all counting on you to deliver whatever they need, whenever they need and also at the right price. When it comes to e-auction, there are few ways that are totally overlooked. What are they? Let’s check out.

More bidders will always mean more savings

The number of bidders always matter for reverse auctions. Based on the analysis of a company, the rate of savings for reverse auctions usually increases by around 1 full point for each participating bidder who is added. Around 80% of the suppliers who are invited actually participate in this event you should make sure you invite the right amount of quality bidders to your event. This holds enough truth for reverse auctions.

Select the right format for auction

e-auctions have evolved a long way since the price-only events which make headlines in the late 1990s. Now there are many event format choices like Japanese, Reverse, Dutch and Factored. Utilizing Japanese and Dutch auctions when there are lesser number of bidders can lead to considerable improved results as against the conventional reverse auction formats. Such a case is more apparent while looking at auctions with fewer bidders.

Train bidders with the right information

It is needless to mention the obvious that the bidders who are pretty comfortable with the technology and the entire process will be better and the more active participants. Data shows that the more are the number of active participants; the better will be the e-auction results. As the total number of bids per line increase, it also increases the overall savings from the event. There is a relation between the amount of supplier conditioning and training time invested in the results of the event.

Offer a good bidders’ target

Within the time you get to the e-auction, you must have already qualified the bidders. They may even be a vital part of your current supply base who is invited to several events. Did you do your homework on the bidders? If yes, then allow them to do theirs as long as constructing your bidding strategy is concerned.

Therefore, if you want to know more on e-auction, read about e-auction here. Don’t let go of the above mentioned areas if you want to get best results.