Reversal of Fortune
3. Allow only pre-qualified, pre-categorized printers to bid on auctions suited to their capabilities and strengths.
4. To reduce input errors and speed bidding, minimize the number of line items required to enter a bid (a single, bottom-line price input box is best). If required, bidders can provide line item summaries at the auction's conclusion.
5. Use reasonable, whole number bid increments.
6. Provide a way for participants to electronically enter a bid, even if it's not lower than the winner. This automatically establishes a backup vendor position in the event of a bidding error or non-performance by the low bidder.
The question remains: do current print market conditions require the implementation of an impersonal bidding process that virtually eliminates, and potentially damages, the classic tenets of building mutually beneficial relationships between buyers and sellers; and minimizes a climate of consultative partnerships, where real, significant, long-term cost saving measures can be explored and implemented?
In examining this question for B2B markets in general, Charles C. Poirer and Michael J. Bauer write in E-Supply Chain Using the Internet to Revolutionize Your Business, define three attributes necessary for an auction market to both develop and make sense:
1. Indifference between buyer and seller must exist; that is, it should be a situation where the buyer is truly indifferent as to the source, so long as the commodity meets required specifications. All purchasers of the commodity come to the auction with equal desirability, so long as they can accept delivery and make payments within the prescribed time frame.
2. The price of the commodity should be the only variable left unspecified. If non-price elements (quality, delivery, lead-time, freight costs) are important, then partnering methods are more appropriate.
3. The auction has to produce some profit for the market maker. It must improve the efficiency of the market, producing value for both buyers and sellers so a portion of the added value can be extracted as earnings for the market number.