The dangers of e-auctions - how to deal with them?

E-purchase auctions, also known as reverse auctions, are an interesting solution that can bring significant savings. It is therefore no surprise that they are gaining more and more supporters.

It is widely recognised that e-auctions result in even greater price efficiency. They also make it possible to partially dispense with time-consuming and often complicated business negotiations with suppliers.

However, the introduction of shopping auctions does carry some risks. What are they?

Deterioration of relationships with existing suppliers

Critics of e-auctions often highlight the fact that this form of purchasing can have a negative impact on relationships between buyers and existing suppliers. This is because it is widely believed that e-auctions only aim to apply price pressure on suppliers.

So what can merchants do to secure negotiated contracts and long-built relationships?

The key to the effective use of e-auctions is to correctly define at the stage of creating purchasing strategies for which groups of materials, goods or services to use e-auctions. This is because it turns out that, if selected correctly, e-auctions do not generate negative emotions among suppliers.

The second important issue is the smooth implementation of the auction results and purchasing's contact with the supplier and internal business partners outside the tendering processes.

It turns out that just following the above principles, which introduce clear rules for e-auctions, helps build relationships with suppliers that are appropriate to the situation.

Increased labour intensity in the purchasing department

The second major The threat of e-auctions is to increase the labour intensity of merchants. Running e-auctions, if not integrated into the tools used, is an additional task that purchasing staff have to deal with.

However, there is a very good solution to this problem, namely the implementation of agile IT tools. Modern solutions ensure that running e-auctions not only does not increase labour intensity, but actually saves time. This allows purchasing staff to focus on activities that bring more value to the company, such as preparing for the business negotiations, implementation of supplier development programmes, etc.