Situation
The buyer, a large European retailer, contacted Scanmarket on a Monday wanting to run an eAuction for labels on Friday of the same week. Previous annual spend had been €1,240,000 across 4 countries and 44 product variants in total. The buyer had a strong wish to consolidate to fewer suppliers if possible. Furthermore, the buyer was under time pressure as a contract needed to be renegotiated before a long holiday break that was just around the corner. 10 suppliers pre-qualified for the eAuction.
Solution
- Collated and issued relevant documentation and information to selected suppliers
- CherryLot Auction - one lot per country each with up to 15 product variants
- Not all suppliers were qualified for all country lots - blindfolding used
- Parameter adjustment added to one of the suppliers, as there was a single preferred supplier
- Scanmarket conducted individual training sessions with suppliers - opportunity to discuss bidding strategy and highlight supplier advantages like market price insight and fair competition
- Spent time on personal contact with suppliers - they felt they were listened to and the training made them feel more comfortable
Result
- High bidding activity - more than 400 bids were submitted and all suppliers took part
- €154,000 savings identified - 12.4%
- Consolidated to 2 suppliers - the buyer was very satisfied with the results
