Reverse Auction – A Weapon You Can Use For Negotiating On Your Telecommunication Services

Telecommunication industry is much vast and there is a lot of choices that you can get while buying mobile or data services. However, the problem is people don’t know about the different sellers and as a result, they just rely on the one that is trusted by most of the people and is known as the best. And by just buying from the only trusted supplier, the buyers don’t get to know about the offers that local telecom suppliers offer to them and lose the chances of reducing their telecommunications cost.

telco-reverse-auction1

Well, don’t need to worry. If you are wondering that how you can know about the services and offers that different sellers are offering then reverse auctions are the answer to that. It is the perfect tool that you can use to find attractive deals on the telco services and to negotiate on them. However, before moving further with the negotiation power of the telco reverse auction, let us provide you a brief description of the term.

A reverse auction works in the opposite way as compared to the direct auction. In this, the suppliers compete to get the business by bringing their selling prices down. A reverse auction is created by the buyers where suppliers bid and re-bid by reducing the price at which they are willing to deliver their services or products. Thus, it gives the buyers a chance to buy best services at minimum rates. And this makes a reverse auction the weapon that you can use to negotiate on telecommunication sourcing process.

Always remember that a reverse auction is not the negotiation process, but it can be a part of the negotiation process. You cannot use the reverse auctions to negotiate the total cost of the deal. Also, there are some complexities for using telco reverse auctions, like varying pricing structures from different suppliers, differences between one-time costs and recurring charges, and other considerations. And even for the discrete telecom services, where reverse auctions are practical, you can use them as a part of the negotiation process. These services are the ones that have straightforward pricing models and can be easily compared when offered by various suppliers.

Moreover, an auction should be the final step in the sourcing process. The one who wins the auction should get the business. And before that, you need to issue a telecommunication RFP to the vendors mentioning all your requirements and initial pricing proposals. An auction should always be executed effectively, otherwise, it can bring opposite results than expected.