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Still Using Business Auction Sites and Paying Up?

The Latest Trend in Auctions Yield a Smarter, Easier Way to Buy and Sell

DALLAS -- October 25, 1999... Auction sites started as an easier way to buy and sell product. For the seller that may be true, but for the buyer, auction sites come with unnecessary hassle. First, the buyer has to do all the work. Second, the buyer too often pays more than an item is worth due to the competitive bidding that drives prices higher. Third, most auction sites are vertical, specializing in one industry or product, which limits a buyer.

Reverse auctions were created to address these issues and lessen the buyer’s burden. All the buyer has to do is make a detailed request and await the lowest bid. The bid automatically goes out to a large population of potential suppliers who then compete for the business, which ultimately drives the price down. However, the problem is that many purchasing web sites are still category-specific and are far too limiting to a company’s purchasing agent whose job is to buy everything from office supplies to computers. So what’s the answer?

"Our research told us purchasing agents want an e-business solution that simplifies and automates their process," says Wes Guillemaud, founder and CEO of Sorcity.com. "Buyers don't want a system that just buys from one industry or one category of product. They want an effective, easy way to purchase everything they need. That’s why we built Sorcity.com as an all-inclusive reverse auction. We believe the buyers are clearly dictating where the auction industry is going."

The buyer of one major international company bid out a 6,000-quantity order of a specific promotional item on Sorcity.com and ended up saving more than 57 percent. This is a savings buyers seldom realize on a category-specific reverse auction. The buyer said the whole process took only two days and that everyone ended up happy – the buyer realized significant savings, while the seller gained additional business, a fair profit and a new customer.

"The limitation I see with vertical (category-specific) upward auction sites is the business buyer has to learn and use multiple sites and could pay significantly more just to use the service," says Rich Lefebvre, VP of New Service Offerings in Electronic Commerce at Electronic Data Systems (EDS). "The all-inclusive reverse-auction model gives the buyer a comprehensive sourcing tool and the same service at no extra cost. So, find me one purchasing agent out there who would actually prefer making their corporate purchases through dozens of specialists, if they could get the same products for less money through one single source."

"Fortunately, buyers now have a choice," says Guillemaud. "We’ve all witnessed how quickly consumers adopted the all-inclusive auction model like Ebay, so it’s time we provide the same comprehensive service to the business-to-business market. Certainly, the b2b market is slower to change, but it is changing. And we’re just happy to be the first to offer businesses what they need -- an all-inclusive sourcing solution."

Sorcity.com, as listed in the 1999 NAPM Technology Guide, is an Internet hosted, business-to-business all-inclusive reverse-auction service. It is a powerful business tool that matches the complex needs of serious buyers to the capabilities of serious sellers quickly, consistently and electronically. The purpose of the service is to improve supply chain efficiency between the buyer and seller within all business segments and all industries.