- Start immediately gathering information on potential suppliers, & on their qualification
- Scrub supplier list ahead of the auction
- Think how online auction will integrate with requisition process
- Determine level of supplier qualification & make sure all suppliers meet that requirement prior to auction
- Craft an enticing invitation message to suppliers, focused on the opportunity for them to gain business. Consider sending it to top sales management or even to CEO
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Request For Quotation (RFQ) |
- Group parts, but only similar ones; not too few, not too many
- Think like a supplier – what would make the package more attractive to them, without increasing your cost or the difficulty to run the event?
- Make sure all invited suppliers can provide all parts in a lot bid
- Remember: order frequency, quantity and value are drivers
- Make sure to set “Reserve” price at a level above which you will not place the business
- Set the “Target” price at a level below the “Reserve”, and at a level you really would like to obtain
- Tell suppliers what type of pricing they are to submit: individual item prices or lot prices
- Load data well in advance; account for time necessary to revise documents if necessary
- Establish clear, written rules – Bind suppliers to them
- Plan ahead - your auction package may need review by Legal, Environmental, Logistics
- Ideal e-Auction size: valued between US$100k and US$10 million, 2-4 line items with no more than 8 line items
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Best Practices