Do you run sealed bid events (RFP and RFQ) to buy or sell high value goods and services?
Traditional Sealed bid events (RFP and RFQ) do not deliver optimum outcomes when multiple heterogeneous items are being bought or sold at the same time.
12% (Aberdeen) – The difference between a traditional sealed bid (RFP and RFQ) and more advanced multi round bidding approach is typically at least 12% – or many millions of lost dollars for high value B2B or G2B tenders.
Why use a Multi Round Bid Platform?
Multi Round bidding delivers superior revenue and cost outcomes
for the following reasons.
Multiple rounds of bidding with live market feedback drives a very different bidding behaviour and bid outcomes compared to traditional sealed bid. Bidders can assess live market prices are re-formulate their bidding strategy over multiple rounds of bidding. This ability to adapt and learn from the market is lost in traditional sealed bid which means buyers and sellers are leaving many millions of dollars on the table simply due to an outdated method of collecting bids. – Multi-round bidding is the only way to allow bidders to understand the market and to re-bid optimally based on live market feedback.
Multi-round bidding makes it easy for bidders to understand where to move their bidding if certain lots become unattractive (substitutes). This ensures sellers or buyers get better results across all the lots not just the most attractive items. Bidders can focus and specialise on certain lots and keep bidding until it makes sense to switch to a more attractive alternative. This ability to switch from one lot to another based on live market feedback is not possible with a traditional sealed bid process – Bidding substitutes is only possible over multi rounds of bidding with live market feedback.
Multi-round bidding also makes it easy for bidders to understand how to bid across multiple items to construct complementary packages that are unique in value to each bidder. Lot packages are either complementary because of economies of scale or economies of scope. Bidders will bid more or less for a package of complementary items because they value the package more than the sum of the individual items – Bidding complements is only possible over multi rounds of bidding with live market feedback.
Sellers or buyers can strategically package lots for bidders using various lot combination strategies drawn from market feedback to enhance competition and to satisfy internal constraints. This feature allows buyers or sellers to offer flexible lot combinations to bidders that increase revenue or reduce costs. Bidders have access to more lot choices along with packaging feedback over multiple rounds that allow them to develop their substitution and complementarity strategies – Bidding on buyer or seller set combinations is only possible over multi rounds of bidding with live market feedback.