Navigating Price Volatility: A Guide for Buyers to Validate Price Increases in Challenging Times

The COVID-19 pandemic has brought about numerous challenges for businesses worldwide. Among these challenges are rising prices of essential raw materials and services, leading to an unstable supply chain and decreased competitiveness in the market. To navigate through these volatile market conditions, suppliers are reaching out to buyers with revised price structures. In this blog post, we explore how intelligent eNegotiation tools, particularly digital eAuctions, can help buyers validate new prices efficiently while ensuring transparency and simplifying the audit compliance process. Discover how eSupplier's cloud-based eAuction platform can streamline your procurement process and aid in supplier discovery.

Price Volatility and Supply Chain Challenges: The price of raw materials continues to rise, placing additional burdens on manufacturers. This upward trend, coupled with ongoing supply chain obstacles, has compounded the difficulties faced by manufacturers during the pandemic. While some price increases are genuine due to market conditions, opportunistic suppliers may attempt to inflate their base prices for higher profits, even when their supply chain or industry is not directly affected by the COVID crisis. Consequently, buyers find themselves under immense pressure to evaluate and respond to price rise requests, with an increased workload and limited opportunities for face-to-face meetings due to health safety concerns.

Leveraging eAuctions for Efficient Price Negotiations: To cope with these challenges, buyers are turning to intelligent eNegotiation tools for support, with digital eAuctions emerging as a valuable solution. eAuctions enable buyers to validate new L1 (lowest) prices quickly and effectively. By creating a reverse eAuction and inviting approved suppliers to compete for their business, buyers can efficiently assess if the L1 price represents the best offer available. This transparent competition among suppliers often results in price reductions, benefiting the buyer while maintaining fairness and integrity in the negotiation process.

Transparency and Audit Compliance: While negotiation via eAuction may not be suitable for specific categories with limited competition, it proves to be the optimal approach for most procured items. Adopting a digital price negotiation process enhances transparency, simplifies the audit compliance process, and ensures adherence to regulatory requirements.

eSupplier's Cloud-Based eAuction Platform: eSupplier offers a cloud-based eAuction platform that is user-friendly and covers multiple types of eAuctions. Whether you are negotiating for raw materials, CAPEX, services, or transportation, our platform provides the ideal solution. Additionally, eSupplier facilitates structured supplier discovery, allowing buyers to easily find global suppliers that meet their specific requirements.

Conclusion: In the face of price volatility and supply chain challenges, businesses need efficient and transparent solutions for price negotiations. eSupplier's digital eAuction platform offers a streamlined approach, enabling buyers to validate prices quickly and compete for the best offers while ensuring compliance with audit standards. Embrace the power of digital procurement and simplify your supplier discovery process with eSupplier. Experience the benefits of efficient price negotiations and enhanced transparency in your procurement operations.