More and more companies
are using auctions to find suppliers.
Suppliers bid on the business
and all services remaining equal,
the low bid wins.
That is a good deal
if you are buying.
A bad deal
if you are selling.
How to avoid having your margins squeezed
by auctions?
GE’s CIO Gary Reiner
explains their strategy…
“The more commodity-like the part or service is,
the easier it is to auction;
and the more differentiated,
the less easy it is to auction.
By design, every year we try to make
more of our business portfolio be
products and services that are noncommodity –
that are differentiated.
So we have been fortunate not to be
as auctioned on the sell side as
we are on the buy side.”
Are your products noncommodity?