| Some professional buyers are still wondering why they | | | | is tracked and monitored. Online bidding systems can |
| should take advantage of reverse auction technology. | | | | usually save all data for quick report generation at the |
| It is true that some items are not good to reverse | | | | click of a mouse. If needed, the live event can be |
| auction, but some are very good opportunities for | | | | viewed in real time by any interested parties from any |
| reverse auction. This article will give a brief look into | | | | internet connection or on a viewing screen in a |
| the top five buyer rewards for using reverse auctions | | | | conference room. Most reverse auction systems are |
| and how the buyer and their company can be more | | | | web-based, allowing interested parties to log into the |
| successful. | | | | system and watch the event live from their desktops. |
| First and foremost, reverse auctions are used to get | | | | The next buyer reward is increased organizational |
| the best available market price at the time of the bid. In | | | | competitiveness. When you reduce costs and improve |
| many instances, a reverse auction will result in a lower | | | | productivity, you make your company more |
| price paid than traditional sealed bids or negotiations. | | | | competitive and therefore more able to attract and |
| While savings are sometimes difficult to accurately | | | | retain customers who seek price reductions. |
| measure, and while some costs are "hidden" (supplier | | | | Streamlining your procurement process through online |
| change costs, set up charges, etc), companies | | | | competitive bidding methods, such as reverse auctions |
| employing this technology in properly conducted | | | | and eRFX, will benefit your organization and your |
| reverse auctions are experiencing often 10% or more | | | | career. When you can show measurable results and |
| real cost savings. Whether you use the last actual | | | | easily report those results to management, both you |
| price paid or bid price reduction, you can accurately | | | | and the organization will benefit. |
| track, report and post the results to all interested | | | | The last buyer reward for using reverse auctions that |
| parties within minutes after the event is complete. | | | | we will talk about today is extending your reach to |
| This leads us into the next buyer reward which is | | | | new potential suppliers. When you use online reverse |
| process improvement. It is true that it may take more | | | | auctions, you can post the bid opportunity on your |
| time to put together a reverse auction bid, but this | | | | website which will attract more suppliers to compete |
| preparation brings about a disciplined, thorough, and fair | | | | for your business. You still must pre-qualify the |
| bid process and ultimately better supplier selection | | | | suppliers, but the increased number of suppliers will |
| decisions. Reverse auctions require special care be | | | | increase the competition for your purchase, driving |
| taken to write accurate specifications and evaluate | | | | down bid prices. You can easily include more bidders |
| the true historical spend information which enable you | | | | via the streamlined e-procurement process. If you wish |
| to better forecast your demand to potential vendors. | | | | to open up your purchase to more can be difficult to |
| This process discipline will improve your productivity for | | | | identify new suppliers to create a competitive |
| future competitive bids because you will have quick | | | | environment for a reverse auction. By posting your |
| access to the information in the future. Reverse | | | | events online in a public format, more suppliers will be |
| auctions reduce the negotiation time from weeks to | | | | able to find you. |
| minutes. The cycle time is shortened which, in turn, will | | | | Finally, you should treat reverse auctions as one tool in |
| reduce costs and improve efficiency for both buyer | | | | your procurement toolbox. Most organizations that |
| and seller. In addition, you will be able to easily duplicate | | | | currently do competitive bidding will be able to see the |
| the bid package if you would like to run similar reverse | | | | value of the reverse auction process and to recognize |
| auction events in the future. | | | | how it fits into their organization. And those |
| Another reward for buyers is bid transparency. | | | | organizations are saving time and money by doing |
| Reverse auctions can be used as a transparent | | | | them right. So don't miss the opportunity to connect |
| reporting tool for all bids accepted. This works | | | | and contract quickly with your suppliers by using |
| especially well in the public sector where every penny | | | | reverse auctions. |