How can you grow your small business in the middle of the Great Recession? Why not turn to a prospective client who buys a lot of everything and always pays on time – Uncle Sam! Through participating in the federal government’s reverse auction buys through FedBid, WBEs (Woman Business Enterprises) – and all small businesses – can quickly tap into billions of dollars in goods and services buys each month.
OK, we hear doom and gloom on the news that we watch and read on a 24/7 basis everyday. And in many ways, it is a vicious cycle – as each trickle of bad news seems to add-up to a flood of ill-tidings that makes it seem that when it comes to opportunities to make it in this world, well, one might as well grab a pillow, pull the covers up, and just spend your days watching Law & Order reruns and keeping up with those wacky, yet curvy, Kardashian sisters!
Well, some observers have really good tips for those who still believe that America is indeed the “Land of Opportunity” – and why did we ever doubt it! That’s because no matter how the economy is doing and how reluctant businesses of all sizes – and individuals – may be to spend, one entity is buying billions of dollars of “stuff” every hour of every day – yes, the federal government! And as Denise Gosnell and Jynell Berkshire of Working Moms Only (http://workingmomsonly.com/) recently pointed out, you don’t need a lot of money or friends in Washington – or millions of dollars in lobbying – to make an opportunity for yourself and for the small business you have – or one that you could create, today!.
Gosnell and Berkshire recently authored an article with the eye-catching headline, “How Women Business Owners Can Obtain Billionaire Clients Who Always Pay On Time” (http://workingmomsonly.com/issues/how-women-business-owners-can-obtain-billionaire-clients-who-always-pay-on-time/). They pointed-out the advantages that WBEs (Woman Business Enterprises) have in the world of federal contracting – and give step-by-step directions on how to build a business – quickly – through getting involved as a supplier of “something” or some service to the federal government. Specifically, these authors highlighted how easy it is for ANY small business to get involved in federal procurement through the opportunities provided to WBEs by FedBid, Inc. of Vienna, Virginia (http://www.fedbid.com/), observing that:
Here is a golden nugget that most certified businesses aren’t even aware of. There is also a third way that the U.S. federal government uses to buy goods and services. That method is called FedBid (www.fedbid.com) and is a reverse auction (kind of like eBay) where you can bid on what you are willing to provide the product or service for. The government then awards the project to the bidder who best met the requirements. The winning bidder will usually be the bidder who offered the lowest price. If you wanted to, you could have an entire business that just focuses on supplying the federal government with what it is looking for on FedBid.com.
Wow! Think of it, you can build your business from the ground-up, based on a single, always reliable client who always wants – and needs – to buy more, and who always pays on time. Even better, you can follow the steps outlined in FedBid’s Getting Started Guide (http://www.fedbid.com/sellers/getting_started/) to begin building your business through participating in reverse auction buys being conducted every day by numerous federal agencies. And if you run into any difficulties, you can contact FedBid’s helpful staff for assistance on the web (mailto:clientservices@fedbid.com) or via a toll-free number (877-933-3243).
So, even if you’re not a small business that fits the WBE categorization, you should really explore how you can grow and expand your business opportunities through tapping into the hundreds of billions of dollars of federal procurement dollars. Experience has shown that reverse auctions create new opportunities for small businesses that participate in these buying events, and FedBid’s staff can help guide you through the process. All in all, it’s a no-risk proposition for any business to expand their horizons and explore new possibilities by becoming involved in the world of federal procurement.
BIOGRAPHY
David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. He is the director of the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also maintains compilations of his student’s publications regarding management concepts (http://toptenmanagement.blogspot.com/), book reviews (http://wyld-about-books.blogspot.com/) and international foods (http://wyld-about-food.blogspot.com/).
From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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RefBan
Sunday, August 22, 2010
Wednesday, August 18, 2010
The Debate of the Tim’s: Can the Buyer-Supplier Relationship Survive – or Even Thrive – with Reverse Auctions?
Last May, The Reverse Auction Research Center published an article on the subject entitled, “Are Collaboration and Reverse Auctions Mutually Exclusive? - Hardly!” (http://reverseauctionresearch.blogspot.com/2010/05/are-collaboration-and-reverse-auctions.html).
Recently, there has been a debate between two quite prominent “Tim’s” in the world of e-procurement over the nature of buyer-supplier relations and collaboration when contracting is opened-up to the competitive bidding environment of reverse auctioning. It has been taking place between Tim Minahan, CMO (Chief Marketing Officer) of Ariba (http://www.ariba.com/) and Tim Cummins, the founder, President & CEO of the International Association for Contract & Commercial Management (IACCM) (http://www.iaccm.com/). Minahan wrote in a recent posting that in supplier-buyer relationships: “Collaboration is often more lip service than a committed initiative. And tough economic periods, like the one we just went through (are still in?) strain even those most committed to real buyer-seller collaboration.”
Minahan’s comments came in response to a July 2010 posting on the matter by the IACCM’s Cummins, entitled “The State of Customer/Supplier Relationships” (http://tcummins.wordpress.com/2010/07/13/the-state-of-supplier-customer-relationships/). In his most recent August 2010 article, “The Bottom Line On Sourcing & Procurement Software” (http://tcummins.wordpress.com/2010/08/10/the-bottom-line-on-sourcing-procurement-software-2/), Cummins expresses a concise argument that on its surface might seem counter-intuitive, but in actuality is quite strong – that reverse auctioning can actually enhance the buyer-supplier relationship. He wrote that:
The idea somehow that online sourcing and procurement tools are enemies to collaboration is misguided for three key reasons (possibly more):
1) online sourcing tools bring a transparency and openness to negotiations that is often lacking from offline negotiations.
2) leading online sourcing tools enable greater buyer-seller collaboration during the negotiation process, often times allowing suppliers to provide alternative bundles, delivery schedules, or product or process innovation recommendations that can enhance the value of the good/service being purchased and take cost out of the system — without negatively impacting the supplier’s profit margins
3) finally, we must be careful not to confuse the negotiation with the relationship. Such online tools speed sourcing cycles 50%-70%, giving buyers and sellers more time to focus on collaboration and relationship management. (In fact, we’re seeing far greater demand for our supplier collaboration and management solutions from those companies with online sourcing tools than those without.)
Bottom-line: I agree that buyers and sellers need to put more commitment into their collaboration oaths. But online negotiation tools and collaboration can not only peacefully co-exist but actually can enhance one another.
Food for thought for all who have held back on using reverse auctions out of fear of jeopardizing their supplier relationships. Just as in life, putting existing relationships to a bit of a test might just actually end up strengthening the relationship and pay unexpected benefits!
David
From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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The Results Are In: York County Pennsylvania's Positive Charge into Procuring Electricity through Reverse Auctions
Image via WikipediaIn July, we here at he Reverse Auction Research Center http://reverseauctionresearch.blogspot.com/ reported on the efforts being undertaken by county government leaders in York County, Pennsylvania to achieve savings through employing reverse auctions in its energy acquisition efforts (see "York, Pennsylvania Charges into Reverse Auctions for Procurement of Municipal Electrical Power" at http://reverseauctionresearch.blogspot.com/2010/07/york-pennsylvania-charges-into-reverse.html).
Well, the results are in, as reported in the two articles below:
- York County gets electric contract through online auction (http://www.empoweredmunicipality.com/york-county-gets-electric-contract-through-online-auction)
- County gets electric contract through online auction: The removal of rate caps made it possible (http://www.ydr.com/ci_15633131).
This is an unusual case - as Scott Cassel, York County's Director of Facilities is thrilled with the results of the reverse auction - even though the county saw the lowest bid increase their electrical rates by 6%. Why celebrate a rate increase? Simply because the 6% increase was the lowest annual increase the county had achieved in any prior year, and expectations had been that the county would see anywhere from a 30-50% increase without the reverse auction mechanism, due to the fact that rate caps had been removed on a state-level! Additionally, the rates will be locked-in for 2011 and 2012, meaning that the net impact will be to produce what is, in effect, a quite significant savings down the line. From the perspective of Cassel, the reverse auction was indeed a clear success. As reported by The Empowered Municipality, Cassel observed that:
"It (the reverse auction) certainly is a great platform to get multiple vendors involved. Having everything right there in front of you basically forces those vendors to sharpen their pencils and come up with the best prices." (Source: http://www.empoweredmunicipality.com/york-county-gets-electric-contract-through-online-auction).
So, with budgets under fire and the pressure on governments at all levels to reduce costs - or at least hold down cost increases - all in the public sector can look upon the innovative use of the reverse auction mechanism here in York County as a case study for how to handle their energy needs.
If you would like to learn more about how your government agency can make effective use of reverse auctioning as part of your energy acquisition AND conservation strategies, please contact us here at the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/).
David
From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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Freakonomics Highlights Reverse Auctions for Energy Efficiency
Image via WikipediaIan Ayres, writing in The New York Times' Freakonomics Blog, has thrown the spotlight on how reverse auctions can be employed by governments to achieve energy cost savings - a topic we've covered extensively here at the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/. His article can be read in its entirety (unlike much of the Old Gray Ladies' web content) for free at this link below:"A Reverse Auction to Conserve Kilowatts" (http://freakonomics.blogs.nytimes.com/2010/08/05/a-reverse-auction-to-conserve-kilowatts/)
Owing to the fact that it appeared in the The New York Times' and especially with the "Freakonomics" moniker, this article will get far, far more attention than my own piece on the State of Missouri's efforts - published in Bizcovering last May:
"The State of Missouri Gets The Most Bang for The Buck Through Reverse Auctions" (http://bizcovering.com/business/the-state-of-missouri-gets-the-most-bang-for-the-buck-through-reverse-auctions/).
Yet, the message is much the same - reverse auctions can produce far, far greater savings in the energy area for governmental spending and grants in this crucial field. So, all officials - at the federal, state and local levels - should take note of this "feel good" - and saves money - story (and no doubt, it does help to have the "Freakonomics" seal of approval on things!!).
If you would like to learn more about how your government agency can make effective use of reverse auctioning as part of your energy acquisition AND conservation strategies, please contact us here at the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/. Without a doubt, our consulting services - even without going to a reverse auction - will be far, far less than the "Freakonomics" guys!!
David
From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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Why Didn't I Think of That Number 2: Silly Bandz
Image by Patrick Gage via FlickrYep, leave it to my friend Steve Czaban to capture the perfect sentiment on the latest kid craze - Silly Bandz. View his video below:
What's silly - and sad - is that we didn't think of this first and then, we could retire off selling overpriced rubber bands!!
Well, let's keep out ear to the ground for the next trend coming down the pipe! In the meantime, back to work!
David
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Reverse Auctions for Credit-card Processing Fees, Part II: Now the Wall Street Journal is Spotlighting an Innovative Firm We Spotlighted 3 Months Earlier!
Image via WikipediaPreviously here at The Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), we’ve highlighted the innovative efforts of Sean Harper and his Chicago-based start-up, TransFS (http://transfs.com/) to bring competition – and cost-savings – to the world of credit-card processing. See our post from May 2010 on how TransFS is making use of reverse auctions to drive down this often significant cost area for small businesses:
“Reverse Auctions for Credit-card Processing Fees: Saving Money for Small Businesses...and Their Customers” (http://reverseauctionresearch.blogspot.com/2010/05/reverse-auctions-for-credit-card.html).
Now, the Wall Street Journal has taken note of the company - and its innovative business model and winning proposition for other small companies. See Tomio Geron’s coverage of TransFs in the recent Wall Street Journal article below:
“Comparison Shopping Online Is For Small Businesses Too” (http://blogs.wsj.com/venturecapital/2010/08/10/comparison-shopping-online-is-for-small-businesses-too/).
Image via WikipediaDavid
From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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Reverse Auctions In Bangalore, India: Bringing Transparency and Savings to Government - and Denying Politicians Their "Cuts"
Image via WikipediaGotta give credit to my friend Jason Busch at SpendMatters (http://www.spendmatters.com/) for nailing what might be the unspoken reason why some elected and appointed officials in governments around the world are so reluctant to introduce reverse auctions and REAL competition into their procurement processes. Yes, graft!
Read his take on the matter here:
Spend Matters: A Case for eProcurement in Government Purchasing -- Denying Politicians Their Take!
Jason references what is a truly fascinating piece from a news outlet I must admit I don't check everyday, the Bangalore Mirror (http://www.bangaloremirror.com/).
In this piece by S Kushala, the author chronicles how local councilmen in Bangalore were coming to grip with the fact that with e-procurement and reverse auctions bringing transparency and accountability to their governmental purchasing, they were suddenly losing their "cuts":
"With the e-procurement platform in place, the BBMP (Bruhat Bangalore Mahanagara Palike) had bade goodbye to manual tenders. Any project above Rs 10 lakh has to be tendered online. This ensures transparency and accountability and does not allow interference from councillors or officials during the bidding process.
And this is where it has pinched them the most. It’s an open secret that work tender means money. And no contractor can bag a project without giving “cuts” to corporators and some officials."
Alas, it sounds like the forces of openness and cost savings have been unleashed in Bangalore, and that it will be hard for even the most motivated of local officials to be able to "turn back the clock" and go back to the days of back-room deals and "cuts."
So kudos to these Indian leaders (and to Jason for bringing it to our attention!). Let's hope that this Bangalore story can stand as a lesson learned for officials all over the world that reverse auctioning and modern e-procurement strategies are indeed a global trend with lots of momentum in this time of tight budgets and calls for increased transparency in government operations all around the globe!
David
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