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eAuction Strategy Format

The selection of eAuction format is dependent upon the competition identified, but there are also other factors that can influence the strategy and thereby the final eAuction format. As a buyer, you need to be fully aware of these factors, and understand how they might potentially influence your strategy and best suitable format.

Factors that can influence your strategy selection, and thereby your eAuction format include:

  • eAuction purpose
  • Number of product lines
  • Product complexity
  • Expected Savings
It is important to highlight that there may be other factors that can have an impact on the outcome of your eAuction, therefore it is important that you spend the necessary time on analyzing these to ensure a solid strategy and so can make the best decision concerning eAuction format.
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Categories suitable for eAuctions

Why Use eAuctions

There are other purposes of eAuctions than 'Savings', including;

Time-To-Market / Resource Savings icon
Time-To-Market / Resource Savings

Save time by limiting lengthy traditional / face-to-face supplier negotiations

Process Improvement icon
Process Improvement

eAuctions offer a structured and uniform supplier negotiation process

Market Transparency icon
Market Transparency

Gain information about the competitiveness of participating suppliers

eAuction Suitability Analysis

The choice between a traditional face-to-face negotiation and an eAuction should be the first activity a buyer performs in the negotiation preparations. Unfortunately, the selected method is often based on a buyer's preference rather then given circumstances. This can result in an inappropriate choice. 
This premediated selection methodology can erode the quality of the final result, as the application of both face-to-face negotiations and eAuctions will increase the buyer's options and thereby likelihood of a successful negotiation. 
When you consider running an eAuction, the first thing to do is determining whether or not your category/product/service/project is even suitable for an eAuction. The aim of the  suitability analysis is mainly to determine whether or not it is possible to run a Reverse Auction. Reverse eAuctions are always the starting point as they typically generate the highest savings. However, Reverse Auctions are only an efficient negotiation method if and when there is enough competition between suppliers. If the competition is low, the choice should be between Step Auctions or Face-to-face negotiation.