Executive
Summary
A
majority of industry analysts have identified the enormous market
potential of business-to-business (B2B) e-commerce over the next
several years. In fact, Forrester Research predicts that of the
$2.7 trillion in B2B e-commerce predicted by 2004, a full 53%
of those transactions are expected to take place in emarketplaces.
These e-marketplaces are online environments that feature new
models for commerce such as auctions, aggregators, bid systems
and exchanges that establish real-time market prices for goods
and services, and achieve a dramatic reduction of purchasing costs
and increased profitability.
RealStreetPrice.com
provides customers with the most comprehensive Global Auction
Services solution for enabling a fully integrated, real time bidding
solution that enables buyers, sellers and other providers to increase
revenue, reduce costs and create a competitive advantage via the
Internet.
Based
on an Applications Service Provider (ASP) model, Global Auction
Services offers customers Web based solutions for conducting dynamic
Internet bidding events. This solution provides real-time pricing
and brings an unprecedented level of profitability, control and
simplicity to corporate sourcing and liquidation processes.
RealStreetPrice.com is the only service to offer:
- Global
reach for buyer and supplier sourcing
- International
language, multi-currency and local time zone support for multinational
e-commerce.
- Free
Request for Information Service (RFI)
- Global
Billing
- Global
Monthly Total Transaction charges, based on a reducing scale
with increased usage.
Global
Auction Services allows corporate buyers to establish real-time
market prices for goods or services, which dramatically reduces
purchasing costs and increases profitability through controlled
Internet bidding events. Procurement managers can use auctions
as an effective tool to improve supplier relationships by gaining
more control over sourcing and procurement processes. Sellers
can use auctions to open new sales channels and generate additional
revenue from new and existing customers by capturing the real
time market value of everything from scarce goods and services
to excess inventories, slow moving goods or obsolete assets.
MARKET
OPPORTUNITY
According
to Forrester research, Global Internet trade will reach $6.8 trillion
in 2004. While North America will represent half of this trade
by reaching $3.2 trillion in 2004, the rest of the world in particular
some Asian Pacific and Western European countries will hit hyper
growth over the next two years.
According
to Forrester Research, a full 90% of US firms in every industry
are moving beyond the traditional constraints of phone, fax, and
in-person communications in corporate procurement and liquidation.
The new model for B2B e-commerce: eMarketplaces that feature new
Net native trading models such as auctions and bidding events
that capitalise on process efficiencies enabled by Internet technology.
B2B
auctioneers previously had two choices for sourcing or liquidation:
- Build
a proprietary auction system.
- Buy
a shrink-wrapped software solution.
Proprietary
solutions are expensive, time consuming, and lead to rapid obsolescence.
Shrink wrapped software has limited flexibility and scalability,
and requires extensive training and support.
Manually
completing an auction process requires the time and effort to
obtain information on materials, components and services. Companies
must create RFQ/RFP packets and communicate with suppliers or
buyers via telephone, mail, email or fax, wait for the responses,
and then further negotiate with the buyers and suppliers. This
process normally takes weeks or months to complete.
RealStreetPrice.com
Global Auction Services help organisations streamline this entire
process by compressing the time needed to complete these procedures
to a few days or hours. RealStreetPrice.com offers a unique service
that allows companies to quickly and efficiently participate in
dynamic Internet bidding events and realise a strategic, competitive
advantage and a rapid return on investment through the power of
Internet auctions.
Analysts
predict explosive growth in the B2B online auction market over
the next three years. According to Keenan Vision, online auctions
will increase from $8.8 billion in 1999 to $88 billion in 2002.
Keenan Vision also expects online auctions to represent a greater
percentage of overall B2B ecommerce sales in the future, growing
from 13% of total sales in 1999 to 26% in 2002.
Online
Auctions
Source: Keenan Vision
RealStreetPrice.com
Global Auction Services Overview
Fast,
Simple, Profitable Solution
Based
on an ASP model, our Auction Services solution can be deployed
on a very rapid implementation timeline. There is no up-front
investment or need to design and implement an infrastructure,
staff an IT team, or purchase any equipment. The system can be
deployed in less than two weeks instead of the months it takes
to develop a robust in-house auction solution. The browser-based,
point-and-click system features an intuitive Graphical User Interface
(GUI). and open systems interoperability ensures that our solution
works with existing technology including Enterprise Resource Planning
(ERP), database and Operating Software (OS) infrastructures. Auction
originators can rapidly have a private-branded site, as well as
set up items for auction, define win parameters and customise
the application and business rules to meet organisational needs
through wizards that guide the originator through the setup process.
Our
Global Auction Services help organisations net a substantial cost
savings from reduced prices and staff time required for sourcing
and liquidation. The application is hosted by RealStreetPrice.com
and paid for via a nominal monthly transactional based fee, revenue
sharing model, which allows the corporation to capitalise on opportunity
costs in other areas. This fee is based on the monthly GLOBAL
transactions an organisations international, regional or subsidiary
offices make. It is also based on a reducing % scale, the more
you use the service the less the % you pay.
Multiple
Auction Types & Formats
Organisations
can choose the most suitable auction types and formats that support
the precise control of market designs required for B2B transactions:
Types:
Forward
Auction
This is a trading model where a seller offers items to many buyers.
This model is also known as an ‘upward’ auction. Typically,
a buyer’s highest bid wins the deal.
Companies
will typically use an online Forward Auction as a platform to
sell obsolete inventory items, assets, and distressed or returned
merchandise. A B2B auction lends itself to efficiently liquidate
capital-binding items such as:
- Finished
products, merchandise
- Custom
and fabricated industrial components
- Industrial
and non-perishable commodities
- Capital
equipment, machinery, office furniture
The
Forward Auction model can also be applied as an effective tool
to allocate limited capacity or rare goods to customers, or to
perform price discovery in a new market.
Reverse
Auction/e-RFQ
This
is a trading model where a buyer invites many suppliers to bid.
This model is also known as a ‘downward’ auction. Typically,
a seller’s lowest bid wins the deal.
A
reverse auction is an Internet-based bidding event that will typically
be performed by a procurement professional when he or she needs
to source goods or services that are not covered by existing contracts
or when contracts need to be (re)negotiated. It is an important
tool for the professional buyer when:
- Faced
with a need to procure goods or services that are off-contract
- Faced
with a need to dynamically source an ad-hoc request where existing
contracts are not suitable
- Facing
a major scheduled supplier negotiation
- Consolidating
suppliers in a spending category
- Re-bidding
existing parts in order to achieve savings or switch suppliers
- Looking
to source new components or materials, e.g. for product development
Typically,
a buyer issues Requests for Quote, Proposal or Information (RFQ,
RFP RFI) to suppliers and invites bids on those requests. Using
RealStreetPrice.com’s Reverse Auction capabilities, a buyer
can post an RFQ to all his/her suppliers or to a specified group
of selected suppliers and invite them to bid online in an interactive
reverse auction event.
Exchanges
This is a trading model where many buyers and sellers can both
offer and bid in a dynamic market environment.
Formats
of Forward and Reverse Auctions
English
Auction
This is the most common auction format. The English format can
be used for an auction containing either single or multiple items.
In an English Forward Auction, the price is raised successively
until the auction closes. In an English Reverse Auction, the price
is lowered until the auction closes. At auction close, the bidder
or bidders declared to be the winner(s) are required to pay the
originator the amounts of the respective winning bids.
Yankee
Auction
This is a method of auction where one or more identical items
are offered for sale at the same time. In a Yankee Forward Auction,
the bidders who have placed the highest bids at auction close
are the winners of the available merchandise at the bid price.
In a Yankee Reverse Auction, the bidders who have placed the lowest
bids at auction close are the winners of the available merchandise
at the bid price. This format is best for rapid inventory liquidation.
Sealed
Bid Auction
This
is a method of auction where bidders submit confidential bids
on an item or items being offered at auction. Bids are submitted
by a predetermined cutoff time. At the time bids are reviewed,
the award of property is made to either the highest or lowest
bidder, based upon the type of auction, Sealed Forward or Sealed
Reverse. In a Sealed Forward Auction, the highest sealed bids
are the winning bids.
In
addition to the formats mentioned above, we also support many
other formats such as Dutch, Japanese, and Open RFB (Request for
Bids) auctions. The system has total flexibility to create additional
business rules for customised auctions that fit individual business
needs.
A
Trusted Solution
RealStreetPrice.com
use software produced by Commerce One who are a leading provider
of electronic commerce solutions to well-known and highly respected
companies, who also provide excellent service and support with
a full understanding of the importance of supplier/channel partnerships
and industry best practices.
Auction
Scenarios
Reverse
Auction used for Sourcing.
Auction
Services simplifies and automates the negotiation process for
corporate buyers to establish true market prices for goods or
services purchased. The real-time Internet bidding process results
in significant purchasing cost reductions.
Automotive
Industry Scenario: The manufacturing operations in an automobile
company rely on a massive supply chain for the procurement of
individual automotive parts used in building cars. When the latest
design model calls for a new CV axle, the company looks to its
trusted suppliers for bids.
Traditionally,
this process would entail a time consuming and costly RFQ and
review process via fax, telephone or one-to-one EDI systems. With
RealStreetPrice.com Auction Services, an RFQ can be electronically
sent to the company’s entire network of trusted suppliers.
Within hours or days bids are received for supplying the parts
and arrangements are made for delivery. With our services, the
company also has control of purchasing criteria for those instances
when distribution, financing or other terms outweigh the lowest
price.
Forward
Auction used for Liquidation.
Auction
Services facilitates a better return on investment in excess/obsolete
inventory disposal by automating the process and providing support
for real-time bidding. This allows companies to change or create
new strategies for inventory disposal, e.g.: from liquidators
to channel, or to new markets.
Computer
Industry Scenario: A company sells nationally known computer peripheral
products. A new 17" computer monitor model is to be launched in
less than a month. The price of the new model is $100 less than
a similar current 17" model that is on the market. There are about
300 units of the current model in the company’s inventory
that need to be sold before the new model can be introduced.
Traditionally,
the company would call several of its distributors or computer
hardware liquidators to sell the end-of-life inventory, typically
a time-consuming and costly process. This model also presents
a high potential for channel conflict between lower liquidation
pricing and the current street price. With our Auction Services,
within a matter of hours or days, the company can have all 300
monitors posted on its B2B Channel Partner Web site and have bids
coming in from its first-tier distributors by the end of the business
day. Depending on the results, it can quickly and easily expand
the particular offering to other channels. The company specifies
the opening bid price, bid increments, quantity and sales format,
and auction runtime.
With
RealStreetPrice.com Auction Services Organisations improve channel
efficiency while maintaining full control over the entire sales
cycle, as well as its brand image, by running its own private-branded
Auction site.
Features
& Functionality
Below
are descriptions of the major functions of the Global Auction
Service.
Graphical
User Interface (GUI) Functionality
Browser-Based:
RealStreetPrice.com Auction Services is an ASP model solution.
It is fully hosted, so all that is needed is Internet-connectivity.
The three modules in the system (administrator, originator, and
bidder) are all browser based and don’t require any proprietary
software. For auction administrators and originators, the solution
runs in Internet Explorer 5.0 and above, or Netscape Navigator
4.6 and above. And for the bidder modules, the solutions is Internet
Explorer 4.0 and above or Netscape Navigator 4.0 and above compatible.
Fully
Customisable: The GUI is fully customisable to meet the look and
feel of an organisation’s identity. Templates allow us to
quickly create the your companies branded look. In addition, we
can include the same navigation bar as the organisation’s
Web site, so users can go back and forth from the external site
to the auction site.
Easy-to-Use:
The Welcome screen efficiently organises the day’s schedule
of auctions, task list and time zone for the auction administrator.
The schedule shows which auctions have started, are starting,
have closed and are closing on that day. The Task list allows
the administrator to approve applicants and auction winners, pause
auctions and authorise auctions created by originators. Other
key tasks include finishing incomplete auctions and setting time
zones. The GUI has a tool set that is present through out the
Auction site. This includes the Help and Search features. The
help feature is context-sensitive and leads to page-sensitive
information. The search feature helps to find open auctions quickly
and efficiently.
Application
Functionality
There
are three modules in the auction applications: Administrator,
Originator, and Bidder.
Administrator
The person who designates the auction super originators, defines
system preferences, defines user field maps, creates currency
and manages auction infrastructure within a client company.
Originator
The person who originates an auction and can have a role similar
to the Administrator depending on the privileges set by the Administrator.
Such privileges can include creating auctions, categories and
user groups, as well as approving auction winners. ."Super" Originators
will have more privileges than other lower-level Originators.
The privileges of the Originator will be a sliding scale that
can vary depending upon what is given to that particular Originator.
Therefore, clients have the flexibility to define exactly what
each Originator can and cannot do. You can do this by predefining
Originator roles and assigning rights and privileges to each role
and then assigning Originators to those role groups.
Bidder
The person making a bid on an offering in an auction or trading
exchange. Also referred to as an end-user or participant.
Features
& Functions based on users roles.
User
Roles: Setting up an auction site for the first time usually
takes less than two weeks, and once the system is in place, the
originator can set up an auction in as little as a few hours.
One of the first tasks that the originator has is to define different
user roles (bidder/subordinate originator) in the system.
System
Preferences: The originator has control over the system
preferences, which are used to control the database, Web server,
auctions, originators, bidder’s view, and the e-mail server.
Only originators can access System Configuration and change the
Value and Help Text that is associated with each option.
Win
Parameters:
Originators can choose to approve auctions manually or automatically.
They define the win parameters, which can be defined by price,
payment terms, sales volume or other predetermined variables.
User
fields/User Groups: User fields are important for gathering
information about bidders, and originators can customise them
based on what information the originator desires to collect about
bidders, such as name, address, phone number and e-mail address.
After defining Users, an originator can add them to a User Group
(or group of bidders), as well as link any user to multiple User
Groups or Categories Once associated with Auction Categories User
Group members are able to bid on auctions in their associated
categories.
Categories/Subcategories:
Originators are encouraged to group auctions into categories and
subcategories so that bidders are better able to narrow the scope
of auction searches by viewing auctions in such a grouping. An
originator can create an unlimited number of details about a particular
auction in the sub-category description. Following the category/sub-category
structure helps the originator better manage a site with numerous
auctions.
Auction
Wizard:
The Auction Wizard is a step-by-step guide that leads the originator
through the auction setup process. The originator has a choice
of either creating a new auction or cloning an existing auction.
The cloning function is useful if the originator creates auctions
frequently, as it allows replication of any previous auction setup
and parameters to save time. This function allows an originator
to clone an auction wholesale then change the particular users,
parameters, times and rules of the auction.
The
Auction Wizard also allows the originator to create Parcel Auctions
that are made up of multiple auctions.
Attachments:
Administrators can attach documents to auctions in several formats,
such as .XL, Word, Word Perfect; graphical formats, such as .ppt,
.eps or .jpeg; as well as multimedia files, such as those using
MPEG or AVI standards. And of course hyperlinks can easily be
added to a custom site to provide a more functional and compelling
auction environment. Furthermore, multimedia files and documents
attached to an auction may be downloaded, viewed and modified
by bidders on or offline. Bidders can then upload these modified
documents and any additional documentation with their bids. This
tool facilitates greater communication and collaboration between
originators and bidders thereby enhancing the originator’s
decision-making ability by providing more complete information
with each bid.
Dashboard:
The Originator Dashboard is a powerful tool that enables originators
to monitor and control auction events from start to close. At
a glance information allows real-time tracking of multiple selected
live auctions; event details for selected auctions; details on
incoming and winning bids and bidders; as well as graphical displays
of the number of bids and the development of bidding prices over
the course of the auction.
Internationalisation:
Originators can set auction start times and limits, and the system
automatically adjusts auction times and deadlines based on each
bidder’s location. The system supports multiple languages
and currencies based on the bidder’s location and preferences.
Multiple-Variable
Bidding (MVB) - User-Defined MVB:
MVB allows originators to predefine variables that capture information
essential to their decision-making process. For example, an originator
can set up an auction that includes not only price and quantity,
but other important variables such as delivery date, shipping
costs, and defects per million shipped as well. This allows for
more sophisticated sourcing and liquidation scenarios
E-mail:
Originators can manage auction e-mail messages by defining notification
parameters. Two types of e-mail messages are used in the system.
One is sent to originators and bidders when particular events
occur. The second is created as needed and sent to the appropriate
bidders. E-mail messages automatically inform the originator and
bidders about the status of an auction. Messages include the start,
pause, continuation and close of an auction. Other automatic messages
that bidders might see include notification that they are being
outbid or that they have won an auction.
In
addition to the functionality mentioned above, the originator
has the ability to Pause, Continue, View Closed, Delete, Move,
and Relist auctions thus ensuring full control over every aspect
of the auction.
Comprehensive
GUI: Auction Services provides bidders with an intuitive
site design featuring real time bidding. Bidder interfaces allow
them to view, bid on and track auctions. In addition, they can
send feedback, search for auctions and get help.
Viewing
Auctions:
Bidders can choose to see either a single or multiple auctions
at one time, as well as preview upcoming auctions. Bidders can
check on the status of current auctions or determine if they are
interested in future auctions. A hot auctions section highlights
auctions that an originator has set apart.
Quick-Bidding:
In standard bidding, a bidder identifies an auction to bid on
and submits a bid. The quick-bid capability shows a spreadsheet-like
view of auction items allowing the bidder to bid on multiple auctions
at once.
Proxy
Bidding: The proxy bidding function automates bidding
so that automatic bids are placed on behalf of the bidder each
time a competing bidder places a bid. Depending on the auction
type, bids will either increase (forward auctions) or decrease
(reverse auctions) in increments or decrements that correspond
to the amount defined for the auction by the originator.
Interactive
Bidding:
Bidders can customise bids; attach files and personal comments
to bids; view, modify and resubmit site attachments, as well as
view the bidding history of an auction and adapt to various time
zones all of which create a more dynamic, interactive bidding
environment.
Bidder
Client: The Bidder Client is an easy to use, browser-based
UI that allows a bidder to participate in an Internet auction.
The Bidder Client can be easily customised to support the unique
requirements of specific bidder groups, and provides at a glance
information on auctions available to specific bidders. Bidders
can retrieve relevant information on auction events or items.
And they can easily open an auction and monitor its progress in
real time, reviewing bidder history and competitiveness.
Report
& Communications Functionality
Total
auction management is available with the Auction Services solution.
Auction tracking and real time reporting are enabled through wizards
that give originators the power to create comprehensive reports
containing auction data. Originators may generate reports on Open,
Paused, Closed, or Deleted Auctions. Pre-designed analysis reporting
saves time and eliminates confusion.
Organisations
have the ability to choose between having a high degree of touch
or total automation over its auctions with e-mail alerts. E-mail
wizards keep auctions on track, confirming user participation,
auction times, rules and outcomes. Messages can be customised
and consolidated so Users aren't inundated with a large number
of messages. The organisation can choose to have the system automatically
respond to the originator and User group as certain events occur.
Or it can have the system prompt the auction originator before
sending any messages to the group. If desired, messages can be
customised.
CONCLUSION
Organisations
can use Auction Services to establish real-time market prices
for goods or services. Organisations also have the power to control
a traditionally time-consuming process to reduce purchasing costs
and increase profitability, as well as improve supplier relationships
and create additional revenue channels.
RealStreetPrice.com
stands apart from other organisations by providing a fully serviced
privately branded auctions site without clients having to make
investments in staff, hardware or software. Clients can streamline
corporate sourcing and liquidation processes with our unique service
with truly global features such as multiple languages, multi-currency
recognition, local time zone support. With RealStreetPrice.com,
suppliers can reduce the costs per transaction, increase revenue
per customer, and acquire new customers. Buyers can simplify the
auction process, improve supplier relationships and receive lower
costs for goods and services. Both suppliers and buyers benefit
from a win-win RealStreetPrice.com Global Auction Services solution
that gives both parties a substantial return on investment.
