Do suppliers benefit from participation in e-negotiation events such as reverse auctions?

April 23rd, 2010

A customer commented last week that their incumbent suppliers don’t want to participate in e-procurement events.

A discussion followed relative to incumbent suppliers view and how long the retailer had been doing business with them vs. the opinion of new sources of supply. In general most vendors in the space would come up with many of the same points listed below. Please read on.

SafeSourcing Inc. places a great deal of value in our SafeSourceIt™ Retail Supplier Database of over 380,000 retail suppliers located throughout the world. Additionally we also place a great deal of value on each individual supplier regardless of their size. We believe that well thought out next generation e-procurement tools can provide significant benefits to buyers and suppliers whether they are hosting or participating in e-procurement events. 

Some but certainly not all benefits that suppliers can anticipate from SafeSourcing are:
 
1. An easy to use e-procurement tool limited to a single page view where a supplier can be completely comfortable that their company’s best foot is being put forward to the soliciting company.

2. An increase in new business opportunities through engagements they would otherwise not be exposed to.

3. Clean data about the soliciting company and an accurate listing of their event guidelines, specifications, terms, conditions and other information necessary to build an accurate and successful pricing strategy.

4. Best practice training in event participation and strategy development.

5. A clear focus on what’s important beyond price in next generation e-procurement tools such as supplier safety certifications and practices as well as their environmental programs that will differentiate them from other suppliers.

6. Closed loop same day reporting of results of the specific e-procurement event a supplier participates in as well as a detailed supplier feedback questionnaire report.

7. Significant time savings associated with new business development that becomes more and more costly based on fluctuating markets..

8. Industry pricing trends extrapolated from their view of low quote information during the event if allowed by the soliciting company.

9. Use of these tools for their own procurement needs.

It sure does not sound like a bad deal to this author as long as it is explained correctly and supported by the retailer as their way of automating their procurement process and record keeping.

We look forward to and appreciate your comments.

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