A tool that can be effective when running a reverse auction is called ranking. While this feature is not used all the time, it can be of strategic importance when trying to get to the best net landed cost for products that have very slim margins at the supplier level. The feature can be set up to let all suppliers know where they rank or a select number of suppliers like the top five (5). The feature can also be turned on for a specific time during the auction like in the last 5 minutes. As an example, you might have tight bidding for a particular commodity-based product. Only the low bid vendor knows that they are indeed the low bid and resultingly is not entering any more price adjustments. If ranking is deployed, vendors can find out if they are 2nd or 3rd etc. and this may entice them to try one more or make multiple more entries if their desire to win the business is strong enough. This is particularly true if the bidding activity has been robust to a point with the low-price indicator switching back and forth between multiple vendors.
It is the deep understanding of markets along with the use of tools like ranking amongst others that are included in strategy reviews with our customers that allows SafeSourcing to regularly exceed customer expectations across all spend areas. Our average annual savings against all categories are more than 24% beyond what you can negotiate on your own.
For more information, please contact a SafeSourcing Customer Services Associate.