The buyer had previously obtained an 11% price decrease with their current supplier for car leasing and therefore felt they were unable to pressure the same supplier sufficiently during a new face-to-face negotiation. Previous annual spend was €4,900,000.
3 suppliers were invited to the eAuction - but there was a strong preference for the current supplier as they had given the best pre-quote. The total difference between the best and second-best suppliers was 9%.
Japanese Auction Chosen to Increase Competition Between Few Suppliers
- It was not feasible to run a traditional Reverse auction, as the difference in price was not very high. In addition, our client did not want one of the new suppliers to win the auction
- A Japanese eAuction was conducted, where each supplier started at their individual start price
- The two new suppliers did not reach the start price of the best and current supplier during the eAuction
- However, the best and current supplier decreased his price by 10.38% - even though he was not treated differently before or during the eAuction
- The main reason for this great result was good supplier conditioning prior to the eAuction combined with a solid messaging strategy during the eAuction. The current supplier continuously knew what our client expected from him
Increased Savings on the Current Supplier by 10.38%
- Total saving €513,000
- Increased savings by 10.38% with the current supplier
- Total number of bids: 62
- Duration of eAuction: 45 minutes