The following are answers to common questions about Sorcity.com. If you do not get the answer to your questions here, please email us and we will respond as soon as possible. Just click on the question to go directly to the answer.

Request one of these Presentations for a good overview:
ISM Presentation: Five Benchmarked Case Studies on Greater Ebid Savings
The Sorcity Ebid Executive Presentation
Conducting Reverse Auctions Safely and Effectively
Questions:
  • Q1 How does the Sorcity.com Process work?
  • Q2 What advice do you offer to maximize my purchasing efficiency?"
  • Q3 What is membership?
  • Q4 What is a "Reverse-Auction"?
  • Q5 What is "Private" Reverse-Auction?
  • Q6 What is an RFQ?
  • Q7 Am I required to buy through Sorcity.com if I use the service?
  • Q8 How do I know if there are enough participating sellers to make it worthwhile?
  • Q9 What do I have to pay Sorcity.com for this service?
  • Q10 Do I lose the ability to "qualify" my sellers by using Sorcity.com?
  • Q11 How am I able to pre-qualify sellers so that only those that fit my criteria get to bid?
  • Q12 Am I required to buy from the seller with the lowest price?
  • Q13 How will Sorcity.com know if I bought from a seller they sent me?
  • Q14 Does Sorcity.com take possession of the goods?
  • Q15 As a seller, how do I pay Sorcity.com once a sale is made?
  • Q16 How is the Sorcity fee accounted for in the sellers bid?
  • Q17 How does settlement between the buyer and seller take place?
  • Q18 When does delivery of goods occur?
  • Q19 What laws govern the transaction?
  • Q20 How does sales tax get addressed?
  • Q21 Do I have a choice with where I do business?
  • Q22 Why wouldn't I just use some software package to do the same thing?
  • Q23 How long does a Reverse-Auction take?
  • Q24 What are Sincerity Price, Starting Bid Price, and Have Paid Price?
  • Q25 Should I create a new RFQ for every item I wish to purchase?
  • Q26 What is a product category?
  • Q27 What is EDI Capable?
  • Q28 How do I describe the items on my RFQ?
  • Q29 What is the difference between Active, Scheduled, Ended and Closed Reverse-Auctions?
  • Q30 What is "My Reverse-Auctions"?
  • Q31 What is "My Reverse-Auction Bids"?


Answers:

What is membership?

Sorcity.com is committed to providing you the best service possible, therefore we go to some length to determine if companies you might be doing business with are legitimate. In order to do this we ask you to register and become a member. This also allows you certain advantages, like signing up for regular email notices on RFQ's submitted, or, saving RFQ profiles to make the RFQ definition and submit process easier. Come join our fast growing service!

What is a Reverse-Auction?

A reverse-auction is a tested and proven sourcing method that has many advantages over the traditional RFQ and RFP process. It is known to save significant time and reduce the purchase price on most goods and services. Instead of a company trying to sell their product to a business or consumer by auctioning it off, the Sorcity.com reverse-auction enables a company to define what product or commodity they want and then receive bids from sellers for the best price and terms available on the market. We have received very positive feedback from several fortune 500 companies on this purchasing model.

What is a Private Reverse-Auction?

A Private Reverse-Auction is one where only suppliers you identify are allowed to bid. This is very good if you know your supplier base well and have done the up front analysis work and want to limit the bidders. This not only saves you the typical Reverse-Auction time of locating new suppliers, administering the RFQ process, and negotiating with suppliers, but it also saves you from supplier qualification steps because you may have already added them to your company supplier list. This may however limit downward price pressure. If your information is confidential, you can even make the auction visible to only those suppliers you invite.

What is an RFQ?

An RFQ is short for "Request-for-Quote", which is in essence a detailed description of a buyers need for materials, products or services and it can include terms and conditions. The RFQ is then sent out to a list of sellers to get an estimate of cost back. Often times a company is simply looking for an estimated price so they can determine if they actually want to buy. Sorcity.com uses the term somewhat different, in fact, because we request that the buyer be serious about purchasing and the seller serious about selling, the RFQ is more like a "purchase request" because the intention is to buy and not just receive quotes.

Am I required to buy through Sorcity.com if I use the service?

Actually no. If the Final Bid at the end of a Reverse-Auction does not meet your Sincerity Price, you are not obligated to award the purchase through Sorcity. However, keep in mind that if market prices in general are going up, you still may save on price even if the Final Bid is higher than your previous price, so set your Sincerity Price accordingly. Making sure your current supplier(s) are included in the Reverse-Auction process is the only way to ensure optimal bidding and lowest market price. This practice also complies with the ISM ethics standard to treat all suppliers equally.

How do I know if there are enough participating sellers to make it worthwhile?

Sorcity.com ensures proper seller participation by:

  1. linking to many internet sources for names of companies eager to bid for your business
  2. advertising our service's ability to offer sellers more business than they could realize without Sorcity.com's free sales leads
  3. increasing our membership through a referral network of buyers and sellers who have already realized the benefits of Sorcity.com.
You can submit your RFQ with the confidence that Sorcity.com can find the number of suppliers you need, OR choose to excercise more control over seller participation in two ways. First, make sure your current suppliers participate in the bidding by entering their information while filling out an RFQ. We will announce your request to them without revealing your identity. This will allow you to see their most competitive pricing in a market free from relationship bias. Second, you may restrict bidding to only those suppliers you designate - in the RFQ form. Your RFQ will be presented to a competitive market of only those suppliers who meet your strict qualifications, yet still promotes the best market price.

Do I lose the ability to "qualify" my sellers by using Sorcity.com?

Absolutely not. In fact, we give you greater ability through Sorcity.com by providing you a consistent means of communicating your terms and conditions which are then stored until you decide to create another RFQ. All sellers providing that product will immediately be notified of your need, terms and conditions. They will all be sent the same information at the same time in the same format. They will be given the same opportunity to ask questions about the RFQ and view all questions asked and answered. At that point they can choose to deliver to those terms or elect not to bid. Once the reverse-auction has ended, you will then have the opportunity to talk with the lowest bidders to confirm all the details before signing off on the selected seller. You make the final decision!

How am I able to pre-qualify sellers so that only those that fit my criteria get to bid?

We realize that qualifying many of your sellers is important if not a policy you must exercise before a purchase can be made. Sorcity.com tries to make each reverse-auction valuable to you and sellers by only notifying those sellers who meet your qualification criteria. When you register there are a series of questions that you and the seller need to answer. These answers provide us the ability to pre-screen sellers so neither your time or their time is wasted. Please note that there may be some other qualification measures that you would like to take, like a person-to-person phone conversation prior to final selection. That is why we provide you with the lowest three bids once the reverse-auction has ended.

Am I required to buy from the seller with the lowest price?

Actually no. We realize there are many factors that go in to making a decision to buy from a seller and that price is only one. Once we provide you the contact information of the three lowest bidders, you may find out that the lowest bidder has a limitation not identified during the reverse-auction, or, they may be a seller that has not performed for you previously and you do not wish to do business with them again - it's your choice. On the other hand, the seller has a choice as well. The important thing to remember is that you submit an RFQ because you are serious about your need to buy, otherwise the time of those companies involved in that reverse-auction has been wasted, which is in contradiction to the membership guidelines. If a pattern of simply "price-comparison" is recognized, your account will be reviewed by Sorcity.com.

How will Sorcity.com know if I bought from a seller they sent me?

We will follow up with you on the first few reverse-auctions you hold to get your opinion about the experience, answer any questions you have, and see if any of the sellers were selected. After these initial events, Sorcity.com will automatically send you a follow-up note requesting you to sign-off on the seller chosen. If you and one of the sellers close a deal, but neither of you indicate this to Sorcity.com, we may continue to follow-up but eventually assume this service is of questionable value to you and review your account. Another option could be to charge the buyer a small transaction fee if no purchase is made on future activity. Please remember, this system is based on the honesty and integrity of our members, and our fees are well within reason given the benefits both parties receive.

Does Sorcity.com take possession of the goods?

No we don't. Our mission is met once we have connected a buyer with a qualified seller that meets their "Sincerity Price", which is the amount the buyer is willing to pay and is interested in receiving sellers names from Sorcity.com. Our goal is to eliminate the "middle-mess", the time and cost of many steps involved in the procurement process, but we realize the final exchange of goods and payment is optimized if it remains direct between the buyer and seller.

As a seller, how do I pay Sorcity.com once a sale is made?

After the buyer has awarded the sale, the winning vendor is sent an invoice for the fee due. Payment is due the date the Reverse-Auction is awarded by the buyer. A $25, late fee will be added to the invoice each 30 day period payment is not received past this invoice date.

How is the Sorcity fee accounted for in the sellers bid?

The seller should make sure the bid they submit includes all related costs including the Sorcity fee. Typical overhead, sales or marketing costs a seller normally includes in their bid may not apply since this sale was provided through this efficient Internet service. Sorcity will ask the seller to confirm their bid before entering it. The confirmation screen will restate the Sorcity fee for your convenience and confirmation.

How does settlement between the buyer and seller take place?

As you do it today. You can follow your current processes and procedures for both the exchange of goods and payment if you like. Sorcity.com will be continually enhancing it's services and may at some time in the future develop a method that optimizes this portion of the procurement process also.

When does delivery of goods occur?

That is between the buyer and seller. Often times the buyer will define their requirements for delivery in the RFQ so this is not left to question. If you are viewing an RFQ scheduled for bid that doesn't address this issue, you may want to ask a question to the buyer through our "Ask a Question" feature in the "View Scheduled or Current RFQ's" section. This may be particularly important if it affects the price to the buyer.

What laws govern the transaction?

We are not in the legal business so would not want to steer you in any direction. Besides the honesty and integrity we ask from our members, we can only assume that the practices you employ today, such as purchasing agreements, will work for you with sellers and buyers you find through Sorcity.com. It would however, be a question you should consult with your legal support on. Sorcity.com has developed a comprehensive feedback system that provides you valuable information on how they have conducted business before as directly noted by other members. Their performance is measured several ways.

How does sales tax get addressed?

Sales tax is addressed in the initial RFQ Form that the buyer fills out. If the buyer elects this as a taxable item, the seller will charge sales tax after the Reverse-Auction, but it will not be included in the bid the seller submits.

Do I have a choice with where I do business?

Yes! On the registration form we ask you where you will or will not do business. This information matches Reverse-Auction opportunities and sellers in order to screen these down to the set that pertains to you. One of the key features of Sorcity.com, is the science behind this capability. We go to lengths to balance member capabilities and requirements, in a standard, automated manner to make the Reverse-Auction more successful.

Why wouldn't I just use some software package to do the same thing?

You can use some software to buy products to accomplish some of what Sorcity.com offers, but the Sorcity.com service has many significant advantages you can gain; no software maintenance fees, no initial expense, no implementation of software or the staff to support and maintain it, and most importantly, there is no cost to the buyer!

How long does a Reverse-Auction take?

The Buyer sets the Reverse-Auction duration which can be anywhere from 1-hour to 3 weeks. For more complex purchases you should either allow more time for suppliers to bid, or provide them advanced notice as to what is needed and when you event will run. Sorcity support will guide you through this and other key decisions. When setting the Reverse-Auction’s start and end dates, the Buyer should consider appropriate Seller lead time required.

What are Sincerity Price, Starting Bid Price, and Have Paid Price?

The Sincerity Price is that price at which a Buyer (you) commits to awarding the ebid to a qualified Seller through Sorcity. This is Not a "target" price, but is instead a "tolerance" price, usually equal to the price you are currently paying (your best negotiated price), so you can view and evaluate all bidders at or below your current price. You can not view bidders above your Sincerity Price. Trying to use a target price may be irrelevant if you ultimately wish to consider all bidders with greater or lesser savings. It may also be harmful if there is no hard basis, because you can experience market fallout if good pricing does not appear to be awardable. This can discredit the buying organization and Sorcity, especially if you later had to increase your Sincerity Price to view more (or any) bidders.

A Starting Bid is the price at which the bidding opens. This is configured by Sorcity based on many factors including market pricing and bid motivation.

A Have Paid Price is your current price (often your best negotiated price you want to beat with the ebid method), for the same items, volumes, quality, and service-levels. It is a protected price not revealed to the market and is used to calculate your ebid savings for you.

Bidding Exception: If you (the bidder) holds the Final Bid at the end of a Reverse-Auction and your minimum bid does not meet the Buyer's Sincerity Price, the Buyer is not obligated to award. However, if the Final Bid is above the Sincerity Price and your lowest bid (lower than the last bid showing) is at or below the Sincerity Price, then your Final Bid will automatically be lowered to the Buyer's Sincerity Price. This allows you to still make the sale at a bid you can honor, even when the live bidding stopped prior to reaching the Buyer's award price.

Should I create a new RFQ for every item I wish to purchase?

You may create one RFQ that includes all items you intend to purchase, or you may separate each item by creating different RFQ’s for every item. The choice is yours, but you can do either on the same form which makes it easier for you. If all the items are related, and normally one Seller offers them all, then you may get a better price by grouping them on one RFQ. However, remember that the Terms and Conditions you choose will apply to all items. If any item requires different Terms and Conditions, it should be added separately on its own RFQ form.

What is a product category?

A product category classifies the goods or services described in the RFQ and determines which Sellers will be notified about your RFQ. Placing your Ebid in the proper category allows Sorcity to notify the correct Supplier group so you have more bidders reviewing your RFQ. This provides for more competition and a better qualified short list of Sellers. Our product categories are classified under three tiers: (1) Products, (2) Services, and (3) Commodities. Products are consumable and non-consumable goods such as "Office Supplies". Services include any employment offering such as Janatorial or Security Service. Sorcity will help you through this or do it for you when posting your Ebid.

What is EDI Capable?

Electronic Data Interchange (EDI) is an electronic method of exchanging standardized business documents such as a purchase order or an invoice. Some Buyers require that the Sellers they do business with are EDI capable. In other words, each of you already use EDI and have the ability to send or receive the identified business documents electronically. EDI can save time and expense once two companies have agreed to an ongoing business relationship. Non-capable EDI Sellers should not bid on Ebids where the Buyer requires it.

How do I describe the items on my RFQ?

Describe your items with as much detail as possible. A detailed description will allow the Seller to accurately meet your need and offer you the best price. Make sure you enter the proper "Quantity" related to the "Unit". Enter the amount of the item you want to buy and the unit-of-measure for shipping. Be aware that units may be grouped per industry standards. For example, if you wanted only one egg, you would enter a Quantity of "1" and a Unit of " Each". If you wanted twelve eggs, you would enter a Quantity of "1" and a Unit of "Dozen". However, some Sellers may not break standard units-of-measure. Enter a "Part No./Model No." if you are ordering a specific manufacturer's product. Part numbers are used to describe a particular part or product and can help a Seller know exactly what you want. Categorizing your items correctly can also effect the final price. See "What is a product category?" for more help.

What is the difference between Active, Scheduled, Ended and Closed Reverse-Auctions?

Active Reverse-Auctions are currently open for bidding. Scheduled Reverse-Auctions are Reverse-Auctions that are not yet opened for bidding. The Scheduled Reverse-Auctions are open for viewing only, bidding is scheduled for a future date. An Ended Reverse-Auction has received all its bids and is no longer available for further bidding because the Buyer has not yet selected a Seller. A Closed Reverse-Auction has been completed, the Buyer has selected the Seller and the sale has been confirmed.

What is "My Reverse-Auctions"?

"My Reverse-Auctions" is a private screen viewed only in your account. It details all the Reverse-Auctions created from your own RFQs. You can monitor the Reverse-Auction progress from this screen. It displays information available only to you such as your " Sincerity Price". Therefore this view is different from the publicly viewed Reverse-Auctions.

What is "My Reverse-Auction Bids"?

"My Reverse-Auction Bids" is a private screen viewed only in your account. It details all the Reverse-Auctions on which you have bid. You can check the status of these Reverse-Auctions from this screen. It displays information available only to you such as "Current Low Bid" and "Your Low Bid". Bids displayed in green indicate you hold the Current Low Bid. Therefore this view is different from the publicly viewed Reverse-Auctions.


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