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eSourcing & Supplier Relationships, Part I

PurchTips - Edition # 61

By Charles Dominick, C.P.M., SPSM


Can You Persuade Suppliers To Embrace eSourcing?

eSourcing - or the process of conducting bidding and/or auctions via the Internet - continues to be a challenge in terms of managing supplier relationships. In the early days of eSourcing, suppliers resisted the eSourcing concept. They feared being "beaten up" over price.

Smart buyers "sold" the suppliers on the benefits of participating in eSourcing events. Here are three of those benefits that you can highlight to persuade suppliers to participate in your eSourcing events:

  1. eSourcing gives every supplier equal opportunity to revise their proposals and,
    therefore, an equal opportunity to earn the buyer's business.
  2. All information submitted by a supplier in an eSourcing event is seen by all other
    suppliers. This ensures fairness. The bidding process is transparent and ethical.
  3. eSourcing yields precise market intelligence with regard to pricing and terms
    available in the marketplace.

Communicating these benefits is still a powerful strategy. Now, many suppliers are willing,
if not eager, to participate in eSourcing events.

However, there still are suppliers who resist eSourcing. And their numbers are growing to the surprise of many buyers. Here is some background on the situation...

eSourcing adoption began accelerating around the same time that the economy went into recession. Suppliers struggled to maintain sales levels. Not in a position to refuse business, they participated in eSourcing.

Today, the economy is improving. Suppliers' sales have increased. They can afford to be more selective with the business they pursue and may again resist eSourcing.

This new era requires a strategy to supplement the one you learned today. In the next resource, you'll learn how to keep the buyer-friendly eSourcing process alive in this new era. Until then, I wish you all the best...

Charles Dominick SPSM, C.P.M.
President, Next Level Purchasing, Inc.

Spotlight On Professional Development Opportunities

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Online mini-course Managing Supplier Performance