When was the last time you changed vendors? Are you being charged a fair market price for your supplies? Procurement teams should revise their suppliers annually. In this way, you can discover new and possibly better vendors providing equitable and competitive prices.
However, we all know that sourcing and procurement are not the easiest of processes. They can be extremely time consuming and labor-intensive. For this reason, we’ve developed innovative e-auction systems like our cutting-edge reverse bidding software to assist you in this matter.
The Game-Changing Nature of Reverse Bidding
In traditional bidding, the seller is the one who initiates an auction and oversees the entire process. A traditional auction can be carried out both online and offline. Reverse auction bidding, on the other hand, is only done online and it is the buyer who sets up the auction inviting suppliers to bid.
Reverse bidding has changed the game and the way procurement teams source supplies. In a tech-centric world, it was only a matter of time before vendors and sourcing teams would move their affairs to the virtual world. And this they have done through e-auction platforms. Here are five ways reverse auction advantages have proved beneficial during these auctions.
1. Enjoy Real-Time Bidding
One of the biggest benefits to be had with reverse bidding is the real-time nature of the operation. Instead of spending weeks going back and forth comparing prices between vendors, an e-auction provides a platform for suppliers to battle it out for your business. And this can be done within an hour or two. The real-time aspect means suppliers are more attuned to the fact that they could lose because of a few dollars. This psychological pressure can work in your favor as each vendor attempts to outbid the competition.
2. Get Fair Competitive Quotes
One of the downsides of traditional procurement is that you may not always be getting fair quotations from suppliers. This is particularly true if you’ve been working with one contractor for many years. They may have gotten quite comfortable with having your business that they began taking liberties and charging more. When you periodically reevaluate contracts and see what else is on the market, you may be pleasantly surprised to discover that you can indeed get the same quality products but at significantly more competitive rates.
3. Save Time with Reverse Bidding
Ask any sourcing and procurement team what is the one aspect of procurement that is the most labor-intensive and the responses will center around getting the various RFX from buyers, sorting through the mounds of information, negotiating with suppliers, and then choosing one vendor. With reverse auction bidding, this entire process moves along at a much faster rate and overall the team saves a lot of time.
4. Save Money with Reverse Bidding
A lot of resources go into the procurement process. Reverse bidding allows you to potentially cut costs associated with the sourcing and procurement procedures because the most important part – negotiating for favorable cost pricing – is done centrally in one auction. Teams don’t have to spend tons of money on calls getting various details and fine-tuning negotiations. In one reverse e-auction, suppliers name their price and fight their way to a better rank in order to win the buyer over.
5. Reverse Bidding Allows for Transparent Negotiations
At times suppliers don’t always understand why buyers choose the vendors they settle for. Reverse bidding can be a learning tool for both buyers and suppliers. Suppliers can understand how to better price their products and how to effectively court buyers. Buyers can also get to see the true market pricing of the products they are purchasing. All in all, reverse bidding promotes transparency in procurement dealings.
Invest in Next-Generation Reverse Auction Software
Are you keen to host a reverse bidding e-auction but don’t quite know which software to use? Invest in next-generation bidding software from ProcurePort, the leading procurement software developer. Our robust, easy-to-use systems are designed to help you save time and money as well as select vendors quickly. Contact us for more information.