Transformational bidding – Part 2 – Handling Rebates and a Sign On Bonus

October 22, 2018
MARKET DOJO, AUCTION, transformational bidding, bidding, rebates, sign on
Our software, Training Material, Blogs, Tutorials, Software Article, Best Practice

Welcome to our second part on our new transformational bidding developments. These features allow you to create advanced pricing lot structures with a variety of new dimensions.

Some of our new capabilities:

  • Creating numeric components
  • Creating picklists with numeric or currency results
  • Allowing the use of numerics in calculations
  • Entertaining multiple totals

To demonstrate a real-world example, we have created an office supplier tender.

In this example we are looking at bidding for office supplies with the following complexities:

1. A lot with 2 line items – UK and mainland Europe

Simply created by having two line items in the lot.

2. Including a sign on bonus that suppliers sometimes give

This is achieved through a component which allows the supplier to put in a sign on price which can be subtracted from the total. This is sometimes used by companies as a contribution towards marketing and internal switching costs.  The sign-on price can also be used to assign savings to the core procurement department as other savings may be assigned to local cost centres.

3. A ‘core’ list with an exact and alternative component

Please see our Office Suppliers category web page.  Normally suppliers can offer alternatives to your exact core list and we have created a multi-line item bid sheet which explains how to do this. In the lot, we can simply have two columns, one for each pricing components.

4. A picklist for the suppliers to decide on their rebate (if they do them).

This uses some wonderful new capability.  You can create a picklist with either numeric or currency equivalents.  In this case, the supplier can pick an option for the rebate and the software will input a numeric value to be used in the calculation in the totals for the rebate.

5. Multiple totals to show the value for the contract based on the exact/alternative core list and the basket.

Finally two total columns are created to represent the full contact value using with the exact core list and alternative, To make this work the formula adds the core list to a multiple of the basket (as normally the basket will be a fraction of the out of core spend) and the sign on bonus is subtracted.  Finally, it is all reduced due to the rebate.

Conclusion:

With all these features you can actually run this either as an RFQ or even an auction with all the calculations giving a live rank on the components and totals. This capability allows the suppliers to see where they are on all facets of this negotiation and adjust according to their strengths.  The picklist lets the supplier adjust additional elements and the software helps constrain these options to the correct formats. We hope you will enjoy this new functionality.

Here are some screenshots:

A participant bidding:

A participant view of the live auction:

A host view of the live auction:

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