Global shipping company provides transparency to suppliers and saves 26.9% using a reverse auction during volatile market conditions.

Challenge

A Scanmarket client run annual reverse auctions for paint to find out what current market prices are and help suppliers with transparency. The RFP scope included 40+ product lines with a total project spend of more than $1,000,000.

Solution

The client had collected updated information on prices, products, and volume for 4 different locations. After an evaluation, only items for a single location were taken to an eAuction.

The RFQ result showed close competition between 3 of the 4 participating suppliers - the leading supplier was significantly cheaper. As one of the prerequisites for the supplier to participate was transparency to the competition and the customer was looking to award only 1 contract, a CherryLot reverse auction was chosen. 

Result

The auction drove total savings of close to 27%. The auction lasted for 2 hours and generated a total of 165 bids, with several suppliers competing intensely for the winning position.

The great result was a combination of the customer's prior experience of eAuctions, their input and use of the right strategy considering the market conditions, along with clear expectation setting with suppliers so they know the conditions and how to win the auction.