Here are some typical reasons or excuses why companies do not to use e-negotiation tools.

August 25th, 2009

Our guest blogger today is David J. Wenig

Many times, new associates seem to be able to cut through the chaff and get to the heart of an issue. In this case a new account manager by the name of Dave Wenig joined us two weeks ago and recently took a stab at this blog post. His first thought was to title it “Why Not?” This author agrees totally. Thanks Dave.

All you ever hear about a business is that they need to increase profitability. After all, that’s the whole point. One of the most common ways that a company plans to reach this goal is to reduce costs. Why then, wouldn’t a company be willing to try new techniques to attain that very goal?

There are many possible answers to that question. One common “reason” not to try new ways of cost-cutting, such as a reverse auction, is that companies don’t want to upset their suppliers. But this is not reasonable concern. It is a very safe assumption that those same suppliers have similar business goals. They too are busy reducing their costs. If this is true, then each time they find success, their long-term customers become high margin customers. The fact is that the relationship with your incumbent will be more balanced if you choose to award them your continued business after e-negotiation.

Another typical “reason” not to use e-negotiation tools is the assumed cost. Sure, all providers will have some type of fee structure. The simple answer is to shop your business around. Compare apples to apples from the different providers in the marketplace. See who is offering the largest and safest source of new suppliers. Check what the cost of running reverse auctions will be. Ask how these providers will assist you with product specifications and other hosted services. Judge the total value, then weigh your findings against the estimated savings that you were shown based on historical data. Then, you will feel comfortable integrating e-negotiation, like the services provided by SafeSourcing, into your own process.

We look forward to and appreciate your comments

Share This Post

If you thought this page is useful to your friend, use this form to send.
Friend Email
Enter your message

Leave a Reply