Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing. Mark asks "Retailer, you just had a great reverse auction and saved a ton of money, what’s next"?
While the answer is probably not going to be “I’m going to Disneyland,” the answer from some of the biggest companies in the world, actually because they are the biggest companies in the world, is more surprising than you think.
Companies invest hundreds of hours gathering specifications and employing 3rd party partners to hold RFIs, RFPs, RFQs, and reverse auctions so that, at the end of the day, they can be assured of reducing their costs on the items that they purchase.
Unfortunately, great prices are only good if the rest of the company knows that they should all be ordering from the vendor that guaranteed and was contracted to deliver those low prices.
By not doing so, your company can actually lose money twice; once for the lost savings you could have received but didn’t because the company ordered from other, more expensive companies, and twice because many of these great deals are made on the premise that a certain volume of purchases will be made from that supplier. If that level is not met, worst case scenario is that there will be financial penalties associated with the lack of activity, but you are at least looking at a situation where that vendor will not offer those same discounts again.
Communicating this information is not as difficult of a task as it may seem, so make sure you have a channel for everyone to go to that will let them know what items are affected by these contracts and who they should be purchasing the items from.
Many times a company will have an intranet that can be used for this purpose. In other cases you may choose to employ a third party to host this information securely for your company. If the latter is of interest to you, contact a SafeSourcing Customer Service representative today to speak about the options available to you in this area.
We look forward to and appreciate your comments.