How does FreeMarkets Online create value for its customers? How is it different from existing/traditional models?
Cost savings through lower prices for sourced materials
FreeMarkets enables the customers to achieve significant savings in procurement by creating a virtual marketplace, in which multiple suppliers around the world can underbid each other in real-time. There are five steps needed to achieve this, which are handled by FreeMarkets Online for the customer:
o Identify those parts of your sourcing, where bidding among multiple suppliers makes sense.
o Help the customer to write a detailed RFQ . The better the RFQ, the better the quality of the bids.
o Identify, screen and support potential suppliers. The customer benefits from FreeMarkets Online's broad experience and directory of potential bidders - more than a single company could handle because of the transaction costs. In comparison to a bought bidding software, which a company could distribute to its suppliers and help them with setting it up, FreeMarkets Online offloads your departments by handling all support inquiries.
o Once everything is prepared, conduct the actual bidding process through the BidWareÃÂ® and BidServerÃÂ® software, which runs in a secure network.
o Analyze the bid process and compose reports for buyer and bidders.
Higher market transparency for buyer because of the higher number of potential bidders:
Traditional way: Supplier's sales representatives sell directly to the client lack of information about the market at buyer's side. The traditional search for suppliers was restricted to the own economic area. The cost for sales effort was on the supplier side only for the work of the sales representative.
FreeMarkets Online model: building up a single channel to multiple suppliers. No restriction of location for taking part in bids. Besides that, transaction costs for individual negotiations are eliminated as much...