Worried about convincing your suppliers to participate in an eAuction? Don’t be!

What if my suppliers won’t participate?

And what if my supplier doesn’t want to go to auction?

These are a couple of questions that I have been asked on several occasions and it is understandably a concern for many of our prospects who want to make the innovative step towards using an eSourcing platform such as Market Dojo.

There are many ways to handle this objection and what I would typically query first is; why would your supplier not want to participate when they want your business? What we must remember is that it is a 2-way relationship between you as the buyer and also the supplier, with mutual benefits between both parties. The host pays the supplier for their services and in return, the supplier provides those services. A supplier submitting a price to you via email is no different to simply submitting a price via an online portal. It is still the same principle.

Email:

1. The supplier receives emails containing RFX’s documents.
2. Supplier answers questions.
3. Back and forth communication via email regarding queries etc.
4. The supplier receives emails containing RFQ sheet.
5. Supplier emails back their price.

eSourcing Solution:

1. Supplier receives event invitation.
2. Supplier registers to the platform.
3. Supplier completes the whole tender in a single event within the platform.

Not only is it easier for you as a host because you can invite as many suppliers as you want to the event, it’s easier for the supplier as they have full visibility of your tender. All of the details relating to your specific tender are managed and contained within the event, meaning no more email threads to keep track of! We have worked hard to make our platform easy-to-use and as simple as possible, to save our clients time when running an eTender on our eSourcing platform.

The Market Dojo software allows you to see how many of your invited suppliers have registered and if they have accepted/declined your eTender invitation. This further allows you to, if required, contact your suppliers to give them a nudge if they haven’t accepted. Via email, there would be no traceability of this.

They won’t participate in an auction?

Reverse auctions via an eSourcing platform are a fantastic way to make further savings and to help obtain the true market cost of the goods/services you’re trying to procure. Understandably, your suppliers may have some reservations about bidding against other suppliers to win your business. But at the end of the day, most suppliers will want your business, particularly if it’s a high-value tender.

The good thing about Market Dojo is that you can score/weight your RFP against the final price in the auction and our platform will do the hard work for you, which means that if a supplier has bid a very low price, they may have scored poorly in the RFP (due to low-quality answers etc) which will be factored against the price. Therefore, that cheapest supplier may not be the best overall supplier. It’s important to bare in mind that while price is unmistakably an important factor at auction, it is not always all about cheapest price in an auction!

Another way to handle any objection surrounding this issue is to make it clear from the start that this is your intention and that your suppliers don’t necessarily have to bid against competition if they don’t want to. They could treat it like an RFQ by submitting their one-off price at the start of the auction and leaving it at that. This way, they have the choice if they want to enter another bid if they are outbid by another supplier. Either way, you as the host are maximising your chances of obtaining the best value from your supplier.

General advice for when running a tender:

• Don’t be afraid to be firm with your suppliers and explain to them that this is your new company process of procuring goods/services in order to streamline and easily manage the procurement activities.
• Explain the added benefits to them, that all the tender information is easily accessible in one place.
• Remember you are not making life difficult for suppliers and are streamlining your process. This process is not technically different from submitting a one-off price via email to submitting a one-off price on a web-based platform.
• Explain that the lowest priced supplier will not necessarily win the business.