How will online auctions affect your business?
October 1st 2006

By Keith Baker,UK Representative ISSA European Board, long term CHSA member

Online auctions have become commonplace, creating a virtual marketplace for buyers due to the success of sites such as e-Bay.With the increased popularity of internet procurement it is no surprise that the process has made its way into the business world and specifically the cleaning industry.This new bidding tool has fostered much debate and discussion with buyers in both the private and public sectors.

E-auctions are typically run in a very structured format on a prespecified schedule in order to ensure fairness to all parties involved in the bidding process.

Several websites, including the Office of Government Commerce (OGC) website are posting eauction guidelines.Organisations with experience in the e-auction arena, such as the Association of British Healthcare Industries (ABHI), also offer advice on their websites, giving candid information on their experiences with the process.

E-auctions have a range of advantages and disadvantages.

Organisers claim that eauction's can save time and provide the very lowest prices on contracts while also reducing error and running more efficiently.The competitiveness of the e-auction is praised for its effectiveness in putting the buyers' interests at the forefront. In most instances it is indeed the buyer which gains the most from the procurement process.

However, e-auctions do have some disadvantages.Customer relationships and service are two areas the cleaning industry has always prided itself on, and in the eauction process these areas often feel the effects first. In fact the most common complaints are tied to service issues.Many suppliers resent the bottom line price driven atmosphere that e-auctions can create.

Whatever the potential drawbacks, e-auctions are here and here to stay.Those of us in the cleaning industry need to be aware of the opportunities e-auctions can present and at the same time ensure purchasers'over-reliance on e-procurement does not undermine the quality of the services and products we deliver, becoming a threat to our industry.

I would encourage our members in CHSA and ISSA to respond and comment on this article.Your feedback is the only true test of what is happening with this technology in the cleaning industry and we can all learn by sharing our experiences.We want to hear from you!

Please send your comments to Mark Armitage,Director of European Services, ISSA mark@issa.com and Graham Fletcher, Secretary of CHSA secretary@chsa.co.uk.

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