We have organized another successful electronic auction in our Fluenta Auction module – this time for Gyulahús Ltd., a prestigious Hungarian business in the meat processing industry.
Our client's goal was to find a system that could support their monthly purchases of raw materials. The previous practice was to send their monthly raw material requirements and request for quotations to the group of bidders via email, which meant that our client had to compare the written quotations received in separate email responses.
Gyulahús Ltd. tested how well electronic auctions could work with their processes with our Auction Mentor service to gauge supplier acceptance and activity.
During the preparation of the procedure, our client specifically informed their suppliers that the procurement process for raw materials for the following month would change and that unlike in their previous procurement rounds, they would invite the suppliers to participate in an electronic auction.
Our client wished to invite around 40 suppliers to the auction, of which 27 indicated their intention to participate and 14 active participants logged into the bidding platform.
The auction, which was originally scheduled to be 1 hour long, lasted 2 hours with 5 minute extensions. Our dedicated experts monitored the auction and dealt with questions from suppliers before and during the auction.
Due to the changing market prices, our client was not able to set an item-level starting price for the auction items, so the price level set by the first bidder guided the auction. In addition, our client requested that participants could only bid if their new bid was better than the previously submitted best bid for the item in question.
Within this framework, at the end of the English-style multi-item auction, we achieved an average saving of 12% compared to the first bid amount. In terms of items, there were some where the auction achieved a 50% improvement, but others only had a 2% difference between the first bid and the final price. In total, the auction has saved our client more than €16 000 this month alone.
Gyulahús Ltd. was extremely satisfied with the success of the auction, so after the successful Auction Mentor service, they signed a one-year license agreement for the Fluenta Auction module.
Are you also interested in electronic auctions?
With the Auction module of our Fluenta software, you can have supplier terms and conditions compete in a rapid negotiation. During the online auction, prices and other important contractual terms, such as delivery or availability times or warranty conditions may all be renegotiated. The Auction module can handle both buying and selling auctions, while the electronic system allows you to have your suppliers compete at the same time, and much faster than in traditional auctions.
Leave it to the professionals!
If you would prefer playing it safe, we are happy to take on the complete process of organizing the electronic auction for you as part of our professional services. In addition, our experts will advise you on the most effective auction type and parameters.
In this case, you can simply watch the auction without having to actively manage it, while our team takes care of all the tasks: from the preparation of the auction tailored to your needs, through the notification and education of participants, to the delivery of the report on the audited processes.
For more details, check out our website.