What is Bidding?
Bidding is an offer (often competitive) to set a price tag by an individual or business for a product or service or a demand that something is done. Bidding is used to determine the cost or value of something.
Bidding can be performed by a person under influence of a product or service based on the context of the situation.
Many similar terms that may or may not use the similar concept have been evolved in the recent past in connection to biddings, such as reverse auction, social bidding, or many other game-class ideas that promote themselves as bidding. Bidding is also sometimes used as ethical gambling in which the prize money is not determined solely by luck but also by the total demand that the prize has attracted towards itself.
Types of Bidding-
- Offline Bidding
- Online Bidding
Bids are published on various sites and many times, those are published in Newspapers too. Generally, High-value bids are published at Newspapers and on Sites, so that maximum people get participate in the Bid.
Bidding in the context of e-procurement
Most large organizations have formal procurement organizations that acquire goods and services on their behalf. Procurement is a component of the broader concept of sourcing and acquisition. Procurement professionals increasingly realize that their make-buy supplier decisions fall along a continuum, from buying simple transactions to buying more complex and strategic goods and services.
There are seven models of the sourcing/bidding continuum. It is important for procurement professionals to use the appropriate sourcing model to get a better response for the bid.
Models of Bidding-
- Basic provider: This transactional model is best for low-value products or services. And Purpose is to gain access to goods at the lowest cost.
- Approved provider: This transactional is mostly useful, for preapproved/qualified goods or services. To reach this status, suppliers often offer some advantages. Companies tend to shift to this model from the basic provider model when they seek cooperation with fewer suppliers.
- Preferred provider: Specifically this relational model suits spend categories with an increased opportunity for meeting business objectives, and mainly focus is on strategy.
- Performance-based/managed services model: It’s an output-based economic model and combined with a relational model. Mostly where the requirement is based on the Projects in hand. This model is followed by the aerospace and defense industries.
- Vested business model: A business model and mindset for creating highly collaborative business relationships. It is used to ensure getting the best absolute value through a transparent relationship with the possibilities for innovation.
- Shared services model: This business model is generally suited for large organizations and has multiple locations and units. And has an opportunity to standardize the consolidated scope of work.
- Equity partnerships: This business model has a very formal contract approach due to the ownership structure. Setting up an equity partnership can be a very complicated and costly process.