1. E-auctions and Reverse Auctions
Do They Make Sense?
Eddy Hagen, VIGC
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2. E-auctions & Reverse Auctions
 Printers say…
 Shocking!
 Crazy!
 Are we still allowed to make money???
 Print buyers say…
 Great tool to cut prices!
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3. E-auctions & Reverse Auctions
 What’s it all about?
 New way of ‘selling’ jobs to printers
 Procedure:
• Information gathering, at selected printers
• First quotes by printers
• Top 5 e.g. is selected
• Online, live ‘auction’ of jobs
• Printers see the price level of competitors and
can adjust their prices, downwards of course…
• Other criteria than price can be taken into
account for ranking
• Outcome: either winner gets it all, or
negotiations with top 3
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4. VIGC Study
 3 parts:
 Survey - General part: how good do
printers know their customers, how do
buyers appreciate the printers
 Survey - E-auctions as such
 Interviews with printers & print buyers
 Survey:
 Online survey
 100 participants, 2/3 printers, 1/3 print
buyers
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5. Do Printers Know what Buyers Want?
 Same question for printers / print buyers
 How important are following factors in
choosing a printer?
• Price
• Quality
• Service
• Creativity
• Flexibility
• On time delivery
• Financial stability
• Stability of workforce
• Thinking along with customers
• Personal contacts
• Skills (printing)
• It-skills
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6. Do Printers Know what Buyers Want?
 Same question for printers / print buyers
 Rating on a scale from 1 (not important) to 5
(extremely important)
 Sometimes interesting differences between
what printers think is important and what
print buyers really consider important…
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7. Do Printers Know what Buyers Want?
 Rating on a scale from 1 to 5
Printers Print buyers
Price 3,94 8 3,94 7
Quality 4,11 5 4,56 2
Service 4,31 3 4,34 5
Creativity 3,23 10 3,42 11
Flexibility 4,40 2 4,47 3
On time delivery 4,44 1 4,78 1
Financial stability 3,08 11 3,66 10
Stability of workforce 2,90 12 3,06 12
Think along with customers 4,13 4 4,16 6
Personal contacts 4,02 7 3,68 9
Skills (printing, graphic arts) 4,03 6 4,38 4
IT-skills 3,26 9 3,75 8
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8. Do Printers Know what Buyers Want?
 But… if we ask this in a different way…
 Which factor is the most important, the
second most important and the third most
important?
 Then we see something different…
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9. Do Printers Know what Buyers Want?
 But… if we ask this in a different way…
Most important factor Printers Print buyers
price 42% 45%
quality 10% 36%
service 23% 3%
creativity 0% 0%
flexibility 16% 9%
on time delivery 0% 0%
financial stability 5% 6%
stability workforce 0% 0%
think along with customers 0% 0%
personal contacts 3% 0%
Skills (printing, graphic arts) 2% 0%
IT-skills 0% 0%
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10. Do Printers Know what Buyers Want?
 But… if we ask this in a different way…
Number of times mentioned
in top 3 Printers Print buyers
Price 96% 1 97% 1
Quality 54% 2 76% 2
Service 48% 3 30% 5
Creativity 3% 8 3% 8
Flexibility 43% 4 33% 4
On time delivery 0% 11 0% 11
Financial stability 26% 5 39% 3
Stability workforce 3% 8 3% 8
Think along with customers 0% 11 3% 8
Personal contacts 13% 6 6% 7
Skills (printing, graphic arts) 8% 7 0% 11
IT-skills 3% 8 9% 6
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11. Do Printers Know what Buyers Want?
 Scale 1-5 vs Top 3
 On time delivery
• Highest ranking for both
• But nowhere in Top 3…
 Skills
• Resp. 6th / 4th ranking (printers resp. print buyers)
• But only 8% / 0% in Top 3…
 Thinking along with customers
• Resp. 4th / 6th ranking
• But only 0% / 3% in Top 3
 So… it seems that both printers and print
buyers take these for granted…
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12. E-auctions, the Printer’s Vision on it
 Q: already being approached by
customer to participate in e-auction?
 39% yes, 61% no
 If not, would you consider to participate?
• 46% yes, 54% no
 If yes, how did you evaluate it?
• Scale 1 (very negative) – 5 (very positive)
• 1: 48%
• 2: 38%
• 3: 10%
• 4: 0%
• 5: 3%
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13. E-auctions, the Printer’s Vision on it
 Q: was the e-auction organised by
existing customer?
 63% yes, 37% no
 Q: did you get enough time to prepare?
 58% yes, 42% no
 Q: were the specifications, questions, …
clear enough?
 48% yes, 52% no
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14. E-auctions, the Printer’s Vision on it
 Q: were there printed samples?
 38% yes, 62% no
 If not, do you believe they were necessary?
• 83% yes, 17% no
 Q: were there technical problems during
the auction?
 31% yes, 69% no
 Q: who got the order?
 No idea: 34%
 The cheapest: 28%
 Best price/quality: 0%
 Shortlist, further negotiation: 31%
 Other: 7%
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15. E-auctions, the Printer’s Vision on it
 Note: now are sample gets thin…
 Q: if you got the job, did it generate
extra work?
 1 resp. (17%) yes, 5 resp. (83%) no
 Q: were jobs conform specifications?
 0 resp. (0%) yes, 5 resp. (100%) no
 If not, did this have an influence on the
production cost?
• 5 resp. (100%) yes, 0 resp. (0%) no
 Could you charge these extra costs?
• 3 resp. (60%) yes, 2 resp. (40%) no…
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16. E-auctions, the Printer’s Vision on it
 Q: did you get other jobs than those that
were auctioned?
 3 resp. (50%) yes, 3 resp. (50%) no
 Conclusions
 The opinion of printers on e-auctions is
very negative
 And often with reason…
• Technical problems
• Not enough time to prepare
• Not enough or not the right information
• No extra jobs, only lots of paper work and a
lower (or no) margin…
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17. E-auctions, the Buyer’s Vision on it
 Q: how important are cost savings?
 Scale 1 (not important) – 5 (very important)
• 1: 3%
• 2: 9%
• 3: 14%
• 4: 27%
• 5: 45%
 Q: how do you want to realise savings?
 Asking more printers for quotes: 58%
 Working with printer to save costs: 64%
 Standardising print jobs: 42%
 Centralisation of print buying: 55%
 E-auctions: 15%
 Buying raw materials (e.g. paper) themselves: 24%
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18. E-auctions, the Buyer’s Vision on it
 Q: did you ever consider e-auctions?
 10 resp. (30%) yes, 23 resp. (70%) no
• Yes: mainly corporates,
• No: e.g. publishers, financial corporations
 If not, why not?
• Never heared about it: 6 resp. (24%)
• Don’t believe in Internet-technology: 1 resp.
(4%)
• Don’t believe in ROI of project: 6 resp. (24%)
• Don’t believe in a good relation afterwards: 12
resp. (48%)
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19. E-auctions, the Buyer’s Vision on it
 Q: what did you expect to get out of it?
 Cutting costs: 7 resp. (100%)
 Time savings: 3 resp. (43%)
 Better insight in market prices: 6 resp.
(100%)
 Q: who got the jobs?
 Cheapest bidder: 2 resp. (40%)
 Negotiations with Top 3: 3 resp. (60%)
 Q: agreements regarding changes?
 4 resp. (67%) yes, 2 resp. (33%) no
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20. E-auctions, the Buyer’s Vision on it
 Q: more e-auctions in the future?
 7 resp. (100%) yes!
 Q: would you do it different?
 5 resp. (71%) yes, 2 resp. (29%) no
 What would you do different?
• More information to printers
• Getting to know people behind the screen
• Better specifications
• Less paperwork
• Being more professional…
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21. Some Interviews
 Printers
 They’re not happy… they feel they don’t
have any control over it
 Too much paperwork, not in relation to
possible profit
 Some questions are intrusive… (e.g. price
structure, pricing policies)
 Sometimes complex jobs need to be
treated as commodities
 The outcome isn’t clear and this leaves a
bad impression
 And ‘accidents’ happen…
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22. Some Interviews
 Print Buyers
 They are looking for professional and stable
partners, also financially stable
 They also cry for partnerships, for problem
solving!
• And they expect initiative from their printers!
 Most important trend: bringing down the
number of suppliers
 Cutting costs is important, but cutting the
complete cost, not only the print cost…
• Look at it in a broader perspective!
 Cost savings with e-auction: 10, max. 20%
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23. Some Interviews
 Print Buyers
 A pharmaceutical company…
• The did e-auctions, for rather complex
promotional material
• The didn’t do e-auctions for very
straightforward stationary…
• Why?
• Because their printer had installed a web-based
ordering system and also did the logistics to
deliver the ordered stationary to the desk…
• And this was difficult to replace…
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24. Conclusions?
 Printers don’t exactly know what their
customers consider important
 E.g. financial stability, partnership
 Printers don’t like e-auctions
 The organisation of e-auctions can be
improved
• E.g. less paper work, better support, better
specifications, printed samples
 They (usually) don’t generate extra work
 But print buyers do like e-auctions…
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25. Conclusions?
 Do they make sense?
 Well, they might…
• If it’s for more or less standardised print jobs
• Not for ‘project’ print jobs!
• And don’t use a nuclear missile to shoot a
mosquito…
• Lots of extra costs, work involved…
 But beware…
• The organisation must be perfect: no technical
problems, not too much paper work, good
questions and clear specifications
 And there is a need for a personal
approach…
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26. Thanks!
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27. eddy.hagen@vigc.org
http://www.vigc.org
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28. Strategic Partners VIGC
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