With the gradually transforming technology, there are multiple modes of negotiations handy with the Procurement Professionals. Reverse Auction is one such method for effectively negotiating with multiple suppliers simultaneously. This has established E-Auction as an integral part of a Procurement Organization.

An Appropriate digitization plan can assist in the optimization of processes, improve the quality of decisions and speed up execution of plans for cost optimization. E-Auctions can prove as first steps in the Digitization of Procurement Landscape.

Many leading organizations are shifting to Reverse E-Auctions for large size purchases. At such time, choosing the perfect E-Auction Service Provider is vital for reaping the maximum benefit from E-Auctioning.

Key Criteria to Select the Best Reverse E-Auction Service Provider

Here are some of the essentials which are must check prior to dropping choice on any service provider.

1. Customer Support Team

Any Reverse Auction initiative will be incomplete without active participation from the suppliers. Therefore, it is utmost necessary to select a service provider that can handhold your buyers as well as suppliers while conducting the E-Auctions.

Buyers would require training on various types of Auctions that can strategize negotiations. Further, they would also require knowledge of options to manage & alter the auction's rules.

On the other hand, Suppliers would require training of the platform. i.e. How to bid, How to calculate, How to know your rank etc. Hence, preventing any kind of ambiguity and guesswork while conducting the live auction.

Therefore, it is mandatory for the service provider to have a highly efficient customer support team that can effectively carry out auction training.

2. User-Friendly Platform

The Procurement Platform is the actual ground where E-Auction will take place. Thus, it is a pre-requisite that the platform is UI/UX Friendly. All the features of the platform must be clearly visible and easily accessible.

Furthermore, the E-Auction Platform must have the following features:

• Automatic Calculation of Total Cost of Ownership.
• Customizable Templates for different kinds of Purchases.
• Live Communication Facility during the Auction Event.
• Facility to Export Auction Event in Excel File for further analysis and strategy formation.
• Must be able to keep a track of Supplier Behavior during the live auction event.

3. Multiple Options for Conducting Auctions

Every organization is unique, every purchase is unique and even every supplier is unique. For different case scenarios, there are different types of eAuctions available. In order to reap out the maximum benefit out of the Reverse Auction initiative, it is vital to strategize Auctions.

Few Popular Types of Online Reverse Auctions are:

• English Auction: In this Auction, suppliers have an option to outbid his price or else he can outbid the L1 Price in the Auction.
• Pure English Auction: In this Auction, suppliers have only one option to outbid the L1 vendor. He cannot outbid his own price.
• Weighted Bid Auction: In this Auction, Suppliers will be able to see only their Actual price only, but their rank will be Calculated on the Weighted price.
• Japanese Auction/Knock Out Auction: The Knock Out Auction can facilitate unprecedented price discovery even in case of a single vendor as till the auction is completed the supplier does not know the rank or existence of other suppliers.
• Dutch Auction: In this Auction, the auctioneer begins with a low asking price and highers it until some participant accepts the price, or it reaches a predetermined reserve price.
• 2nd Bid Auction: In this Auction, Suppliers have to decrease their price twice to view his rank in the Live Auction. If the Supplier didn't reduce price twice in the live Auction then he won't be able to know his rank.

These are some of the major types of Auctions. Depending on the circumstances, materials and past experiences with the suppliers, the Reverse Auction Service Provider shall assist you in designing the most suitable Auction strategy.

4. Proven Work Experience

While choosing the Best Reverse Auction Service Provider, it is crucial to selecting a partner with broad experience. Many organizations claim to be the best. However, there are very few who keep their word.

Therefore, before making any decision, one shall check the relevant Client Testimonials and the organizations which are using the Auction Platform. This will get a glimpse of platform functionality and the support they offer.

5. Auction Insight Report

The Auction Insight report plays a vital role in strategizing the future auction events. Through the report, one can get the information regarding the total savings achieved from the Auction Event. Besides that, it will also yield information regarding the Supplier Bidding pattern.

Over a period of time, all this information will collectively ease the process of the most effective strategy formation for conducting auctions.

Why E-Auction is beneficial for both Buyers and Suppliers?

In recent times, E-Auctions have risen has an important part of the negotiation strategy of many procurement organizations. Apart from Superior Cost Discovery, E-Auctions offer many benefits to both Buyers and Suppliers. Below enlisted are the same:

Benefits to Buyers:

• Negotiate Effectively in Less Time.
• No Hassle for Calculations.
• Transparent Buying Process.
• Visibility and Logs of All Bidding Activities and Actions.

Benefits to Suppliers:

• Opportunity to Earn More Business.
• Simple Bidding Process.
• No time investment in preparing proposals.

If you are following all these steps properly, then you will surely get a trustworthy Reverse Auction Service Provider.

Confused How to convince your management? Then read our article on, How to Convince your Management for Investing in E-Procurement Solution?

For more questions or queries, feel free to reach us.