COVID-19 Market Dojo's Official Statement To Our Customers
In our past Webinar “Is it time you questioned eAuctions?” two of our Market Dojo’s coowners, Alun Rafique and Nick Drewe, directly addressed some of the pain points that those thinking about running eAuctions might face.
As part of the webinar, we sent out forms to all attendees to gather an understanding of what their concerns were when running an eAuction. Below are some of the most highlighted issues and how we advise addressing them.
“Ensuring suppliers know what they’re doing”
It’s going to be a reoccurring theme across most questions, however you really cannot underestimate how important, accurate and sufficient supplier information is to the eAuction process. When sending out your invites to tender the more information you include the better equipped your attendees are to hit the ground running.
It’s wise to include information on how the event will run and what platform you will be using. At Market Dojo we offer a free sandpit feature, giving hosts and participants the chance to run a trial event, replicating how the real event will run. This also leads on to our next point, which is selecting an easy to use tool. A lot of platforms can offer complicated features that might not be as easy to pick up for first time users, so consider whether your participants are seasoned vets or first timers, before choosing which software you want to run your eAuctions on.
For more information on what to include in your event invites, to achieve best results, our Customer Success Specialist El has written a really useful guide with lots of hints and tips. You can read El’s guide here
“Which products & service categories are most suitable for an auction?”
When considering whether your product or service is suitable for an eAuction, first consider your understanding of your marketplace and category. The better understanding you have, the more successful event you are likely to run. This understanding can come from your suppliers, so a competitive auction with lots of relevant suppliers can really help develop your understanding of factors such as true market price.
The next point is our old friend accurate and sufficient information. The tighter product specification that you are able to give your suppliers, is likely to directly affect the success you have.
An example might be for a supermarket looking to buy fizzy drinks stock. On paper you would imagine this would be a very suitable product category for a successful auction. However, if you simply tell your suppliers that you are looking to buy fizzy drinks with no further specifications, how do suppliers know what kind of fizzy drinks you are looking for? You will end up with all kinds of fizzy drinks at all kinds of price, which of course can lead to you not knowing what you’re buying. You might have had a cola drink in mind at the beginning but have now ended up with Soda water because they have come in at the lowest price. This isn’t because of the product category not being suitable for eAuctions, but rather a lack of information. You can avoid this problem simply by being more specific with the product, “We are looking for 400 units of Cola flavoured fizzy drink, in 1litre recycled plastic bottle, must be a diet variation with no added sugar.”
The idea of tighter product specification can also help to run a successful eAuction in a niche category. As there might only be a handful of suppliers able to produce a specific product but by giving out enough information you are able to narrow down these companies quickly.
If you don’t believe us and think you have an idea that couldn’t possibly be auctioned, take a look at Jon’s blog here, to see some of the weird and wonderful things we at Market Dojo, have had run though our tool.
“Coordinating supplier availability”
The easiest way to tackle this issue is to know your suppliers, what are their hours of operation, what time zone do they operate in? There is no point in running a 1 hour eAuction if the majority of your suppliers at tender are in North America and are fast asleep. To combat the time differences globally it might be an idea to run an event long enough to span across several time zones.
Giving your suppliers enough time to prepare for an event by sending out invites early is also a good idea. The more notice you give the more likely suppliers are to participate.
“Avoid encouraging suppliers to under-price and then struggle to deliver”
This is a popular topic that we have recently covered in our blog “eAuctions: A deal too good to be true?”
As a host you are able to exercise your rights of Buyers Choice to make an informed decision based on who the right supplier is for you, rather than who can offer the best price. Bidding can be a competitive process and it is easy to get carried away, hence the occasional bid that falls way above/below the true market price. By using your suppliers bids, look for the price compression, this is where the final bids tend to gather in your auction, from this you can determine what a sustainable and true market price is, as this is the price that the market is paying around.
Another way to prevent this type of issue happening, is to run an accurate RFI and RFQ process, so that only suppliers who are able to meet your requirements will take part in your event.
“Inviting more suppliers to get a better price”
It is true that more auction bidders can lead to a more competitive auction. However, inviting more suppliers doesn’t necessarily mean more live auction bidders and it’s the combination of other factors that can maximise the competition for a given tender. What we mean here, is that you could invite 50 suppliers to auction but if only 3 are likely to bid there was no need to invite more than 3. If these 3 suppliers are all actively bidding they will inevitably competitively bid to produce the best price for you, the host. The more bids, the more accuracy is a simple rule to remember.
The way to maximise your auction bidders, is to send enough accurate information to your suppliers on the product or service you are looking for, such as the quality and quantity needed. If we are looking for 10,000 blue ball point pens, we need to ensure that the suppliers attending the auction know we are looking specifically for 10,000 units and the pens to be blue. If a supplier can only have provide 5000 pens or only produce black pens there is no need to include them in your tender as they are not going to be able to bid.
If you are looking to find out more information on eAuctions or have questions of your own, why not give our webinar a watch here.
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