Identifying 1 Supplier per Country
The buyer, a large Nordic retailer, wanted to conduct an eAuction on stretch film. The buyer wanted to have 1 supplier per country, so a CherryLot™ Auction was chosen to group the products into lots per country and have suppliers compete per country. The current spend amounted to a 2-year contract of €782,361. The buyer was looking to source 1 supplier per country for all products. The competition per country was not very high, especially at the line-item level.
Increasing the eAuction Competition
- 5 suppliers were pre-qualified for the eAuction based on a thorough RFP
- The RFP revealed that for one country no competition existed between the suppliers and for the second country it was only nr. 1 and 2 that were competitive on prices
- The buyer was certain that suppliers would be willing to bid aggressively for the order based on market intelligence, so a CherryLot™ Reverse Auction was chosen
- The products were divided into two lots - one per country
Result
- Very high bidding activity - 385 bids submitted
- The eAuction lasted 44 minutes including 8 extensions of 3 minutes each
- Messaging was used to drive up competition and increase bidding activity
- Lot 1: 8.25 % saved with low competition - and the buyer managed to pressure the cheapest supplier to lower his total price even further
- Lot 2: 24.73 % saved with competition between 1 and 2 alone. The supplier ranked nr. 2 in the RFP ended up winning, offering the lowest total price
