The Ability of the Market to Bring Buyers and Sellers Together in an Open Environment

May 22nd, 2019

Is Critical in Indicating the True Value of a Product or Service.

 

Today’s blog is by Alex Borbely, Vice President of Sales at SafeSourcing, Inc.

Recent advances in electronics and internet technologies have had major impacts on supply chain management and on sourcing strategies and practices. One such development that has attracted the attention of many companies and gained popularity is the reverse auction, also referred to as on-line reverse bidding. Over the past few years, many companies in a variety of industries have started using reverse auctions. The list includes GE, Boeing, Sun Microsystems, HP, P&G, Dow Chemical, Staples, US Foods and many more.

In speaking recently with a CFO of a leading company in their vertical who believes in using reverse auction technology and has used this procurement method in past organizations that he was also the CFO, he stated “If you really believe in what you do with procurement and reverse bidding, which is more measurable directly to the P&L than any solution I have ever deployed, then reverse bidding is surely the best procurement strategy that a company can deploy. Not only in-direct spends but also capitol and direct spends. It can save jobs as well.” This CFO can effectively argued that nothing they (procurement departments) are working on can have a larger impact on their company and employees. Not new stores, not new branding or new products. Nothing.

The most obvious benefit from reverse auctions is in purchasing cost savings to the buyer. As any dollar saved in purchasing cost adds a dollar to the bottom line. Reduction of procurement costs has always been a high priority for top management. Reverse auctions/on-line bidding can have significant impact on reducing purchasing costs.

SafeSourcing eProcurement, particularly reverse auctions, are a relatively new way to increase your bottom-line using e-Procurement tools to enhance the spend process. Utilizing new technologies as mentioned will add profit dollars without selling one new customer buying your products or services. The savings are traditionally 10X your investment in e-Procurement tools. You’re just accepting a different way to solicit bids/pricing even with your incumbent vendors that you currently work with.

For more information on how SafeSourcing can help in your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative

 

 

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