A Real Example: ₹4.2L Saved in 45 Minutes
A FMCG company in Ahmedabad was spending ₹8.6L/quarter on flexible packaging materials from a single vendor they had worked with for four years.
They ran their first reverse auction. Here is what happened:
Before: Jain Packaging Co. · ₹24/metre · ₹8.6L/quarter After: Shah Packaging Ltd · ₹19.4/metre · ₹6.4L/quarter Saving: ₹2.2L per quarter / ₹8.8L per year
The 45 minutes of auction time generated savings they had been foregoing for four years.
Why Do Prices Drop So Much?
Vendors know they are competing. When a vendor is the only one being considered, they have no reason to offer their best price. When 6 others are bidding, they do.
The auction creates a reference point. Vendors can see the current L1 price (anonymised). They know exactly what they need to beat.
Procurement friction is removed. In a traditional multi-vendor RFQ, comparing quotes takes days. In a live auction, the decision happens in 45 minutes. Vendors price accordingly.
What Categories Work Best?
- ✓Commodity purchases (steel, chemicals, packaging, electrical components)
- ✓Standard services (transport, security, facility management)
- ✓High-volume recurring spend (quarterly or more frequent)