03 Apr

5 Reasons why eAuctions Drive Better Savings

eAuctions are online real-time dynamic discussions between one purchasing organization and a group of pre-qualified vendors competing for the purchaser’s trade. Procurement specialists can use eAuctions to engage and negotiate with more vendors utilizing an organized approach which thus eliminates any need for cumbersome one-on-one meetings. They are far more convenient than conventional discussions and negotiations, providing procedural integrity and transparency while also lowering final prices owing to enhanced supplier competitiveness. Through genuine and collaborative cooperation with business vendors, they produce innovative approaches to current procurement difficulties. eAuctions almost guarantee that businesses get the best price for their items and/or services, irrespective of whether the marketplace is growing or declining (Scanmarket, 2020).


Digital bidding, or eAuctions, is a more efficient way of negotiating with vendors in the international market. Numerous talks used to be done in person, via email, or by phone. Considering today’s modern online procurement technologies, customers and sellers may interact from all over the globe to compete for goods and services. E-auctions have numerous advantages for all parties involved. E-auctions can also be utilized to get the greatest price on practically any market offering throughout all sectors, regardless of the sector (Jose, 2020)


Procurement eAuctions may be used in a multitude of sectors and domains, including industrial machinery, supply chains, logistical operations, telecommunications, commodities, and business technical support programs. There are several types of eAuctions and they include dynamic auctions, English auctions, Japanese or the ‘opt-out’ auction, and Dutch or the ‘opt-in’ auction (Jose, 2020).


E-auctions are often transparent, enabling small organizations to engage in the process and, as a result, allowing suppliers to participate in emerging businesses. The highest bid might contribute to greater commerce because most customers will go to their current vendors for ‘non-core’ commodities. An e-auction gives procurement specialists with competitive prices for its products by pitting vendors against each other while discovering who could still deliver the best deal. This also speeds up the transaction process by eliminating the need for individual vendors to present a detailed project (Medius, 2021).


Due to the “winners curse,” a phenomenon in which a vendor exaggerates just how much they really must drop their offer in reverse auctions to succeed, procurement officials feel auctions would not assist businesses to meet their financial goals. This generates mental reluctance among vendors to drop costs, as businesses dread dipping within their own margins needlessly (Pattapurati, 2021).


The following are five reasons why eAuctions help your procurement team save money as eAuctions have certain benefits and characteristics that come along with them, and they are:

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General Cost Reductions:

Maybe it is just one of the advantages of eAuctions, but it is still significant! Procurement price reductions can have a major influence on a business bottom line. eAuctions technology can reduce the cost of purchasing products and services by up to 20%. Putting vendors against one another on an open system can enhance competition and reduce prices, allowing a company to acquire the cheapest value for a certain occasion. Businesses may be able to benefit from both short-term profit growth and long-term capital investments and maximize savings as a result of the above. Online bidding appears to be a magic bullet for lowering prices rapidly while utilizing e-business solutions.


Numerous providers seek businesses in better prices with eAuctions, which seem to be remedied by procurement activities conducted by an individual client. Online auctions, according to advocates, can reduce the cost of buying items and services by up to 20%, rendering these ideal the e-business applications of preference for enterprises experiencing diminishing sales and profitability. These reductions are substantiated by eAuctions software provider Cimmra.


Cimmra is an easy-to-use e-Procurement platform designed to run your eAuctions with a simple workflow, quicker cycle time, and several time and effort-saving features. Subscribe from this link to have a free test run.



E-auctions were shown to save between 25% and 50% more than traditional face-to-face discussions throughout an RFP process. eAuctions save money in comparison to a regular BAFO tendering process. Contractual situations that seem to be closer to the lowest money ‘cherry pick’ conclusion result from purchaser slightly higher compared engagement, competitive costing transparency, and splitting allocation and distributing of agreements. Data-driven telecommunication operations and services have become the business standard, and electronic procurement platforms are streamlining and automating the purchasing process. It’s time for the Auctioneer to take the stage! (Macfarlane, 2017).

Introduction to Strategic Sourcing


Process Efficiency:


Process efficiency has hand in greatly reduced capital waste because online auctions or eAuctions can assist expedite, optimise, and accelerate the procurement process by making purchases easier and faster. Whereas conventional upfront auctions can require days to develop, eAuctions can indeed be completed in under an hour, with positive and favourable outcomes. It is possible to consolidate knowledge, leading to greater management. Communicating and planning may be carried out in a single interface, making it much easier to coordinate with vendors, which would, in turn, save costs for the procurement team with sourcing, negotiating and contracting, ensuring compliance with business protocols and the monitoring of supplier’s performance and efficiency (5 Things that Highlight the Value of Reverse Auction Software, 2018).


In terms of producing a procurement outcome of efficiency and effectiveness and driving better savings for a procurement team, eAuctions are generally highly efficacious. Companies assist procurement specialists in developing and executing categorization and subcategory management and implementing strategies, plans, and streamlining the purchase process. eAuctions standardize RFP development, distribution, and assessment according to their own essence. Monitoring can be evaluated and duplicated using a central interface. These factors lower the likelihood of analytical inaccuracy, getting the procurement program to occur effectively and efficiently thus reducing costs that would transpire from unmanageable and unruly coordination, distribution, and insufficiency of strategic plans and procurement procedures (Macfarlane, 7 unbelievable ways eAuctions reduce buyer telco costs, 2017).


Comparative Of Standardization Offerings:


Manufacturers present their bids throughout a specific website in a standard manner, allowing the eAuctions infrastructure to evaluate proposals, offerings, and bids, then to provide reliable results for a said company. Suppliers may stretch and optimize offerings and bids based on factual and real market knowledge and information via eAuctions, which enable real-time monitoring and evaluation. Reduced manual process intervention is fundamentally impartial and increases the feedback’s reliability. Buyers and suppliers both benefit whenever vendors are chosen based on who can deliver the greatest bargain instead of who seems to have the most competent sales representatives (Vendorful, 2018).


Suppliers’ risk is decreased because they have more assurance. As an outcome, marketplace value is reflected in the prices. Tender-cost-of-sale profits are not included. Vendors can learn about the industry by receiving pricing evaluation throughout an eAuction, allowing businesses to change where they have been weakest in order to give quality pricing to their clients (Macfarlane, 2017).


The most effective method is eAuctions having mechanisms in place which require and request suppliers to double-check their proposals and approve and validate potential rebidding alongside them. This method reduces blunders, errors, repetition, and humiliating erroneous choices which all reduce costs and in turn, drive better savings for company procurement teams throughout an organisation (Macfarlane, 2017).

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Increase in Bottom-line Savings:


Enhancing the openness of business auction increases the business’s integrity and transparency and enhances procurement report-ability, allowing businesses to develop trusting buyer-supplier partnerships while saving money and increasing efficiencies. Today’s modern cloud-based Software as a Service (SaaS) platforms, such as Cimmra’s E-Auctions, make implementation simple and provide a quick return on investment. It’s simple to create an auction: choose your products, invite your vendors, and start bidding! Using a unified platform, organize the processes of proposal gathering, vendor selection, bid comparisons, approval procedure, transactions, financing, and transportation tracking and management (Gep, 2021).


A vital procurement goal has indeed always been, and therefore will probably always be, obtaining cost reductions and enhancing your company’s bottom line. However, the supply chain effects of the global pandemic significantly impacted margins for many firms, putting additional pressure upon procurement to deliver cost reductions quickly. Therefore, it is essential and necessary for businesses to increase bottom-line savings which can be achieved by the use of eAuctions, and as result procurement teams are able to drive better savings. Data shows, that on average, eAuctions manage to obtain and secure a bottom-line savings of about 10% (E-AUCTION, 2021).




For the purchaser, eAuctions provide real-time statistical information, immediate assessments of various supplier offerings, and the consequent reductions over the benchmark. Negotiations and agreements with various vendors that would typically take weeks, if not longer, can now be concluded in minutes or hours. It shortens the selling process and lowers the cost of acquisition for vendors. It moreover gives vendors fast and legitimate feedback and insight on their prices and competitive market positioning and status (Sachdeva, 2020).


Online auctions (eAuctions) may be set up in a matter of days and concluded in a matter of hours. Offline marketing tendering procedures are being drastically reduced. Vendors have held to stringent deadlines thanks to computerized and automated communications. Increasing current contract speed and assisting vendors in lowering overall expense and other costs of sales and acquisitions (Sachdeva, 2020).


An e-auction is a trade that occurs in an eCommerce industry or an electronic market between sellers and bidders (suppliers in business-to-business settings). It can be B2B (business to business), B2C (business to consumer), or C2C (consumer to consumer), and it enables vendors to compete for contracts based on a public specifications and criteria by bidding electronically against one another. Online real-time interactive talks between such a buying organization and a set of pre-qualified suppliers contending for the buyer’s business are known as eAuctions. Procurement professionals can use eAuctions to interact and bargain with much more suppliers in a somewhat more structured manner, eliminating any need for time-consuming one-on-one interactions. They are significantly more efficient and convenient discussions and agreements since they provide operational consistency and openness while also reducing final sale prices due to increased vendor competition (Medius, 2019).


The aforementioned five reasons are a brief explanation of why eAuctions drive better savings for procurement teams, as eAuctions offer and feature particular perks and qualities which accompany them, from general cost reductions, process efficiency, acceleration and improvement, standardisation offerings, an increase of bottom-line savings and time savings which all are basic reasons of why eAuctions drive and push procurement teams to cost reductions and drive excelled savings.

Introduction to Category Management

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E-AUCTION. (2021, 10 21). Team Procure | 3 Reasons Why Your Procurement Team Should be Leveraging E-Auctions. Retrieved from teamprocure.com: https://teamprocure.com/blog/leveraging-eauctions

Gep. (2021). Thank You | GEP. Retrieved from www.gep.com: https://www.gep.com/white-paper/thank-you?sourcenid=4476&type=whitepapers&source_pageurl=https%3A//www.gep.com/white-papers/reverse-eauctions-how-retailers-can-optimize-spend-and-improve-profitability

Jose, V. (2020, 4 28). Procurement eAuctions: Delivering savings in a tough economy. Retrieved from Letsema: https://letsema.co.za/consulting/nextgenops/procurement-eauctions-savings-in-tough-economy/

Jose, V. (2020, 4 28). Procurement eAuctions: Delivering savings in a tough economy. Retrieved from Letsema : https://letsema.co.za/consulting/nextgenops/procurement-eauctions-savings-in-tough-economy/

Macfarlane, B. (2017, 8 2). 7 unbelievable ways eAuctions reduce buyer telco costs. Retrieved from Procurement and Supply Australasia: http://procurementandsupply.com/2017/02/7-unbelievable-ways-eauctions-reduce-buyer-telco-costs/

Macfarlane, B. (2017, 2 8). 7 unbelievable ways eAuctions reduce buyer telco costs. Retrieved from Procurement and Supply Australasia: http://procurementandsupply.com/2017/02/7-unbelievable-ways-eauctions-reduce-buyer-telco-costs/

Medius. (2019). What is an eAuction? The Benefits of Electronic Auctions. Retrieved from Medius: https://www.medius.com/glossary/what-are-e-auctions/

Medius. (2021). What is an eAuction? The Benefits of Electronic Auctions. Retrieved from Medius: https://www.medius.com/glossary/what-are-e-auctions/

Pattapurati, P. (2021, 1 8). Use eAuctions Instead of “3 Bids and a Buy” for Greater Savings. Retrieved from Future of Sourcing: https://futureofsourcing.com/use-eauctions-instead-of-3-bids-and-a-buy-for-greater-savings

Sachdeva, M. (2020, 4 28). Procurement eAuctions: Delivering savings in a tough economy. Retrieved from Letsema: https://letsema.co.za/consulting/nextgenops/procurement-eauctions-savings-in-tough-economy/

Sawhney, M. (2003, 7 1). Reverse Auctions Cutting Costs. Retrieved from CIO: https://www.cio.com/article/267180/consumer-technology-reverse-auctions-cutting-costs.html

Scanmarket. (2020). What are eAuctions? Retrieved from Scanmarket: https://scanmarket.com/en/resources/learning-center/what-are-eauctions/

Vendorful. (2018, 9 25). 5 Things that Highlight the Value of Reverse Auction Software. Retrieved from Vendorful: https://vendorful.com/5-things-that-highlight-the-value-of-reverse-auctions/

About the Author- Dr Muddassir Ahmed

Dr MuddassirAhmed is the Founder & CEO of SCMDOJO. He is a global speakervlogger and supply chain industry expert with 17 years of experience in the Manufacturing Industry in the UK, Europe, the Middle East and South East Asia in various Supply Chain leadership roles.  Dr. Muddassir has received a PhD in Management Science from Lancaster University Management School. Muddassir is a Six Sigma black belt and founded the leading supply chain platform SCMDOJO to enable supply chain professionals and teams to thrive by providing best-in-class knowledge content, tools and access to experts.

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