Pier 1 Imports leverages e-auctions
Staff -- Purchasing, 4/6/2006 2:00:00 AM
The key to finding savings with e-auctions is knowing when to use them and when not to. For retailer Pier 1 Imports, shopping bags and tissue paper were considered prime candidates for reverse auctions.
Pier 1 spends as much as $11 million annually on shopping bags, according to Jim Tyson, director of corporate purchasing at Pier 1. Through Sorcity, a reverse auction provider, purchasing decides which suppliers it wants to include while giving Sorcity the freedom to include any other bag suppliers it can find.
Pier 1 saved about 20% through holding auctions for its shopping bags and boxes. It saved 32% on tissue paper, which was a limited auction because there aren’t many tissue paper manufacturers.
Tyson tells Sorcity the priority of what he’s looking for as well as quality concerns. Instead of spending time
doing research, qualifying suppliers, and putting together proposals, purchasing can leave it up to Sorcity. “You have to establish all the parameters no matter how you do it, so we give it to Sorcity. They create and handle the whole process. A week later we have the best bidders,” says Tyson.
“It saves us from going out to find suppliers. In some areas we might only know one or two vendors,” says Tyson.
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