A Scanmarket Savings Snapshot on Service Agreements
Japanese Auction saves Scanmarket client more than $600,000 (10.38%) on car leasing.
This Scanmarket client had previously negotiated an 11% price decrease with their current supplier for car leasing. They felt they were unable to pressure the same supplier sufficiently during new face-to-face negotiations, but they preferred to remain with that supplier. Previous annual spend on car leasing was €4.9 million, so the potential savings were high.
The difference in pricing was not very high among few suppliers, and Scanmarket's client did not want one of the new suppliers to win. A Japanese e-auction format was chosen to increase competition between few suppliers.
The 2 new suppliers did not reach the start price of the best and current supplier during the e-auction. However, the best and current supplier decreased their price by 10.38%. The Japanese e-auction resulted in €513,000 in savings with 62 bids in 45 minutes with no discrimination among participants.