How Buyers can validate price rise in these difficult times

COVID pandemic has left many businesses struggling. The price rise of essential raw material or services has given a big blow to the competitiveness of the final product, unstable supply chain. Such volatile market conditions are driving the high cost of raw materials and services. As a result, most buyers are getting an email from Suppliers with the newly revised price structure.

The price of raw materials is increasing, and manufacturers face cascading challenges through their existing supply chains. As prices continue their upward climb, manufacturers are still dealing with the supply chain headwinds and plaguing the industry throughout the pandemic.

For some procured items, the price rise is genuine. At the same time, few opportunistic suppliers try to inflate base prices for higher profits, even if their supply chain or industry is not affected by the COVID crisis. Buyers are busy evaluating and responding to price rise requests and are highly stressed as the quantum of work has spiked. Today most companies have restricted one-on-one meetings with suppliers due to health safety concerns.

Buyers are turning to intelligent eNegotiation tool for help, and digital eAuction is the best way to validate new L1 prices fast, as it takes few minutes to create reverse eAuction and invite approved suppliers to compete to win your business. The primary function of the eAuction is to validate if L1 (lowest) price is the best offer on hand with the Buyer, and price reduction is the function of the transparent competition among suppliers.

Negotiation via eAuction process might not be fruitful for a specific category of materials or services where competition is limited with just one or two approved suppliers. However, eAuction is the best way to go forward for most procured items and adapting the digital price negotiation process as it leads to Transparency and simplifies the Audit compliance process.

eSuppliers offers cloud-based easy-to-use eAuction Platform which covers multiple types of eAuction, which are ideal for negotiation from Raw Material, CAPEX, Services, and Transportation.  In addition, at eSupplier, Buyers can also use our structured new supplier discovery process to find global suppliers with ease.