eAuctions: Get Your Game On
Imagine having access to several suppliers or buyers at the same time and being able to completely bypass time consuming back and forth price negotiations or costly marketing and sales initiatives. Welcome to the world of eAuctions. eAuctions are quickly replacing more traditional methods for the buying or selling of goods or services by using a web-based electronic platform.They are not only rapidly gaining popularity in the private sector but are widely used as a method for procuring goods in the public sector due to their inherent cost effectiveness.
Auctions have existed since prehistoric times and their primary function has remained the same: to provide buyers with opportunities to purchase items at better than expected prices. In an eAuction, the process becomes automated. While some companies opt to buy software and run their own online auctions, there are many secure and reliable companies that provide eAuction services. The applications to choose from are numerous making it easier to find those that can be integrated with the systems and processes you already have in place.
The eAuction route might be appropriate if you’re looking to obtain goods or services with high value in order to generate reasonable savings and increase market share. There are some caveats to bear in mind however. Due to the nature of the transaction be sure that the goods or services you’re seeking are relatively straightforward and can be defined precisely through the provision of pictures, drawings or thorough specifications. There also must be a sufficient number of players in the market who are interested in participating in the auction.
Advantages and Benefits
There are definite benefits and advantages that can be gained by participating in eAuctions. One of the biggest attractions for many organizations is the potential for cost savings. Besides providing a more dynamic pricing environment, by automating the process, timely and sometimes costly manual processes can be eliminated. Additionally a company can more easily expand globally to optimize their buying and selling power without having to make a significant investment. The transparency of the eAuction marketplace is also appealing. There are clear guidelines set up by the eAuction provider for both parties so transactions can occur faster and more efficiently. Participants in the auction are also pre-qualified which lessens the risk. If you’re a buyer you’re able to compare goods and services more easily and have access to information regarding non-price factors that can also inform your purchase. For sellers, eAuctions can provide a good place to offload hard to sell items or items they wish to sell quickly. Whether successful or unsuccessful in the bidding process buyers and sellers gain real-time information about specific markets which can be helpful in guiding future business strategy.
While there are many benefits to eAuctions, on the flip side of the coin, companies must be aware of potential risks and liabilities. For example, be sure that the company you’re interacting with has not misrepresented itself or that you’re not exposing your company to privacy and security breaches by conducting business online. Crowdsourcing of the vendor or customer is something else that needs to be considered. Ensure that payment processing is clearly laid out so there is no misunderstanding as to how it will take place or that you’re hit with hidden costs. Even though the transaction is being conducting online, direct partner interaction is extremely important: know who you’re dealing with. It’s not just significant for the immediate transaction but could have an impact on your other transactions. For example, is doing business with a particular organization going to be detrimental to other relationships you have in place? The last thing you want to do is damage valuable, long-standing partnerships. Luckily due to today’s advances in Internet security and the existence of reputable eAuction providers, many of these risks can be mitigated if not eliminated altogether.
So now you need to decide if entry into the eCommerce arena is something that would work for your company and support business objectives. If you’re unsure, continue to gain knowledge to see how eAuctions could be used to your advantage. Talk to others in your industry who have participated to learn about their experiences. If you do decide to enter the online auction market, the good news is you can enter slowly and don’t need to go it alone. Because of the proliferation of eAuction service providers there are many options available as well as support.
RSVP for Change: Before entering the scene, spend time preparing. From a buying perspective, identify products that might be suitable to source through an online auction. From a selling perspective, look for locations where like products are being sold and understand the parameters for participating. In both cases, ensure that the selected products are straightforward and have well-documented specifications.
Management Insight: Before participating in eAuctions, perform an analysis to determine where there is a significant enough market to sustain the buying or selling activities. Taking the steps to participate in eAuctions can provide a low cost method for your organization to explore eProcurement and eCommerce opportunities.
Linda Craig (@LindaCraigRSVP)
More Supply Chain insights at www.Retention.ca
