The A-Z of Reverse Auctions – Market Dojo Takes Us Through Their Alphabet

We're pleased to feature a guest post from Market Dojo, providers of auction-related and other procurement solutions and software.

We love reverse auctions! Yes, as a solution provider we are biased, but through what other means can you negotiate with a large and diverse number of suppliers in such an efficient and effective manner?

Reverse auctions are certainly not a new concept, yet there still seems to be some hesitancy amongst procurement professionals to adopt reverse auctions as a method of negotiation. Whilst we would advocate that there is certainly a time and a place for auctions, they can definitely be used for more than just ‘non-essential, non-ingredient, non-packaging, indirect products – like stationery’ as we were told recently.

We thought we’d share with you an A-Z compilation of categories that have been e-auctioned through Market Dojo, with the average savings recorded, in the hope of providing some inspiration to others:

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Automotive parts has seen an average saving of 32.5% across items like bus batteries, bulbs, doors, mirrors and windscreens.

Bedding has been auctioned on our platform 7 times, with average saving of 33%.

Construction works is by far the most popular category in the ‘C’s with over 500 auctions run through our tool, with great success too - average savings are 16%.

Digital Media brings us into the contentious area of Marketing. However, with an average saving of 26%, it has salvaged many a departmental budget crisis.

Energy is a very popular category with a 7% average saving and one we see great opportunity for an “eMarketplace”, equipped with standardised templates and pre-approved vendors to make this auction category accessible to all.

Food Ingredients. Defying the disbelievers, food ingredients have been auctioned dozens of times, with savings around 6% on average.

Golf carts were one of the more left-field auction items we’ve auctioned, yet has benefitted from 9% saving.

HR Services demonstrate that auctions are not just suitable for components. We’ve seen an average saving of 23%, perhaps ironically protecting a few jobs as a result.

IT Software often passes through our tool, reaching an average saving of 38%.  We’re talking anything from ERP to Expense Management to Anti-Virus solutions.

Janitorial Services is another popular choice with janitorial supplies close behind.  Between them we’re looking at over £9.6m saving (22%).

Kitchen Equipment has seen clients save over £3.6m, albeit only a 9% average.  Still, I think we could all benefit from £3.6m lifted from the bottom line.

Laboratory Equipment leads the way in savings for the ‘L’s with an average of 36% saving. We wish we could tell you what was purchased but we’d need a PhD in Medical Sciences to work that out!

Management Consulting, “we’re not widgets, you know” was a famous line we heard from a bidder in these auctions.  Very true, but you do have a clear service requirement and a negotiable fee structure.  The auctions in this area generated a stunning 52% saving on both sides of the Atlantic.  Machined Parts is the most popular ‘M’ for us, with close to 600 events and a 19% saving.

National Road Freight.  This is a red-hot area for us with our Freight eMarketplace being pioneered by a global client for spot-buying freight.  With an average realised saving of 50% across more than 3,000 eAuctions in the past 12 months, it’s clear to see why.

Office Supplies, which had to be mentioned as the typical spend category that is put forward to auction. With more than £14m spend being auctioned and average saving of 20% it’s easy to see why.

Passenger Transport Services has seen 58 events average a 15% saving.  P is a popular letter for categories as we also see a lot of Packaging, Pumps, Pipes, Pallets and Print!

Quimicos (Spanish for “Chemicals”) auctioned by a sugar mill in Guatemala who average a 26% saving.

Retail supplies, a very popular category with over 100 products going through the tool from ready meals to bottled water to nappies!  9% average saving equates to an astonishing £59m annual saving.

Sea Freight with an average saving of 23% across 3 clients, totalling over £1m saving.  Another red-hot area for an online marketplace with pilot projects already proving the concept.

Tooling, average saving of 31% for tools used to shape the Range Rover Evoque and the Mini Cooper.

Umbrella...ella...ella, or in this case, a lot of them.  Saving of 58%.  Failing that, Uniforms is a very popular choice with an average of 13% saving.

Valves is one of the most popular ‘V’s with 83 events and average saving of 32%.

Waste Management, average saving of 15% across 23 events to eliminate wasted procurement opportunities.

Xerox Print Management with an average saving of 28%.  This was a difficult letter; we haven’t had anyone use the tool to buy X-Ray machines or Xylophones...yet!

Yoghurts for a leading supermarket that we’ve probably all sampled saved £266k (11%).

Zebra Printer Consumables conducted by Cancer Research and they saved £50k (35%).

We hope you enjoyed reading this and that you might take a closer look at the first letter of your spend categories to compare how you get on.  Of course, if you’d like to run an auction, or many auctions, come and talk to us to learn more! The software is easy to use, and you don’t need to make a long-term commitment or spend a lot of money to get started; there really is no excuse for not giving it a go.

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