Online Bidding: How to Extract a Supplier’s True “Best Price”

As a retailer, the pursuit of optimum retail pricing is ongoing and relentless. Customers have access to competitive pricing in their buying decisions. Day in and day out, you are subject to the scrutiny of what you are selling and at what price. To survive and thrive, you must respond by delivering superior quality at the right price. Any misstep means a loss of customers.

But how focused are you on the supplier/vendor side? Do you subject them to the same scrutiny?  Are you aware of all the suppliers that can provide what you need? Do you have access to the most competitive prices?

If you are looking for a solution, online bidding is your answer.

The Online Bidding Process

In a nutshell, the process is driven by software available on an as needed basis through a website. Using the online bidding software, the company entertains bids for a product or service from a pre-screened group of qualified suppliers.  The bid submissions are conducted with participating suppliers collectively, in real-time, and typically lasts approximately 30 minutes.

During the event, buyers can view all the bids, information about each supplier, product specifications, and any other pertinent information that may factor into the decision. Suppliers cannot see the bids of other suppliers, but are flagged if they are the lowest bid.   All participants have the opportunity to better their price at any time during the bid process.  Most do, and continue to do so as the event progresses. The bidding stays open until all suppliers have submitted their final bid.

This process, as we consistently witness, motivates suppliers to deliver their actual best price. Clients are continually amazed at how substantial the reduction often is to a supplier’s previously stated “bottom line”.

Following the conclusion of the event, documents are provided showing the different price and quality scenarios and other relevant information for review and evaluation. You can then take your time to award the business with the knowledge that you have a true competitive comparison.

The Results

Cost reductions through this process are consistently averaging between 15- 45%, with the highest savings seen to date coming in at a whopping 87%!

Our clients have had tremendous success in 2017 alone. Here is a sampling of this year’s results in Canada:

Events held:

– Uniform Purchases  -Electrical Services
– Waste Removal – Plumbing Repairs and Maintenance
– Office Supplies – Janitorial Services
– Fire and Safety Services – Delivery & Courier Services


Results achieved for these events on average:

  • 7 vendors participated
  • 35% lower costs provided by the lowest cost vendor
  • 28% lower costs provided by the second lowest cost vendor
  • 16% lower costs provided by the current (incumbent) supplier

The Bottom Line

 The traditional manual RFP process is an out-dated system. It is cumbersome, time-consuming, and does not deliver a true competitive bidding process, far from it as seen in most cases.

Online bidding is a well supported, proven method of delivering substantial reductions in costs, while maintaining the integrity of product quality and supplier performance. This ensures that your costs are as competitive on the buying side as your customers demand on the sales side.

For more information on online bidding and other cost reduction techniques, please e-mail Eugene at

Eugene Duynstee is President of KPM Enterprises Inc., a company focused on implementing cost reduction programs in large and mid-sized organizations. KPM Enterprises Inc. is headquartered in Mississauga, Ontario, Canada. Further information can be obtained from our website at

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