E-Auction:Value Exceeds Savings
SAFAL is a major provider of E-Auction Applications for the Purchasing Department, with over a decade of experience. E-auctions, which take advantage of recent technological advancements, have had a substantial impact on the way many businesses conduct their purchase activities. Among the most significant advantages for purchasers include lower purchasing prices, improved market efficiency, increased procurement process efficiency, and access to a broader supplier base.
Key features of E-Auction:
Challenges faced without e-Auction:
Let us see some examples of organizations which benefited using e-Auction:
E-Auction benefit for Buyer:
When procurement experts use an e-auction to find competitive rates for their products, they are pitting the suppliers directly against one another to determine who can offer the lowest price. The procurement process is also simplified and saved time as a result of the fact that each supplier is not required to submit a complete bid.
E-Auction benefit for Seller:
E-auctions are often open, allowing smaller enterprises to participate in the process while also opening up new markets for suppliers to expand their product offerings. A successful bid might result in additional business, since most buyers would try to obtain their “non-core” products from their existing supplier after receiving a favorable quote.
The most immediate advantage of reverse auctions is the savings in purchasing costs that the buyer receives. Considering that every dollar saved in purchasing prices translates into an additional dollar added to the bottom line, lowering procurement costs has always been a major focus for senior management. Because many organisations who use reverse auctions buy in bulk, they are able to take advantage of even greater cost savings as a result of their purchases. Because of the considerable savings, businesses have been able to enjoy short-term profit growth as well as better profits on their investments.
If the market has the potential to bring buyers and sellers together in a transparent atmosphere, this is crucial in determining the genuine value of a product or service. In order to maximise the success of reverse auctions, it is necessary to consider the following factors:
- Due to the ability for Suppliers to monitor their Ranking Status in relation to the bids of other Suppliers, purchasers benefit from Suppliers "fighting the price out."
- The ability to bid is not restricted to people who are physically present. It does away with territorial restrictions and allows for worldwide searches for the best pricing to be conducted.
- Because of the reverse auction's ability to include a larger number of providers while maintaining transparency in the bidding process, it makes it possible for a supplier's excess capacity to be successfully employed to meet the buyer's demand in a more efficient manner.
- The improved smoothness and speed of the procurement process is another important consideration for both buyers and suppliers. Traditional discussions take far longer than reverse auctions. Traditional discussions can take several weeks, whereas online auctions can be concluded in 3 to 8 hours.
- All paperwork, communications, and negotiations via mail, fax, and phone calls are eliminated, as are many rounds of bidding. With a click of the mouse, decisions are taken, and discussions are completed within one business day.