How should companies decide what products and services can go through the e- negotiation process?

April 19th, 2010

There really is no reason to shy away from taking any product or service to reverse auction as part of your overall e-negotiation strategy to compress pricing.

There are however some simple questions companies can ask themselves when considering any product, service, or category for consideration in the e-negotiation process. Several but not all of those questions would certainly include the following three.

1. How many suppliers are available and willing to bid on your business?

It’s obvious your company is already aware of your incumbent suppliers. The more important question is what other suppliers are available and how can you find them.
Several will exist within you own geographical area that you are not even aware of. Many others may be located across the country that are also very interested in earning your business.

2. Does your company have the complete detailed product specifications for this product or service readily available or are you familiar with a source from which you can get them easily?

Are your products specifications kept in some form of central repository or are they in the mind of your buyer? This is the single largest obstacle to successful e-negotiation events.

3. How much of the product or service are you willing to commit to buy over what period of time?

What period of time are you buying for? Is there an opportunity to contract for a longer period of time in order to raise volumes? Is there an opportunity to aggregate dissimilar products in order to increase the e-auction size?

If you are well prepared, there are suppliers willing to bid for your business that offer quality equal to or better than what you are presently receiving for your products and services at a better price and with better service. That’s win-win-win.

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