ASCII Rolls Out Reverse Auction Tool For VARs

The reverse auction request placed by the solution provider must be an order worth a minimum of $5,000, and distributors that want to bid are required to reply within 24 hours and ship the order within a week, said Alan Weinberger, chairman and CEO of The ASCII Group.

"We already have a couple-hundred thousand dollars in bids in the system," said Weinberger. "We think millions of dollars in product will flow through this annually."

ASCII developed the reverse auction tool in only six weeks after the ASCII member advisory board requested it.

Solution providers said the reverse auction tool has the potential to save them significant time in comparing the prices of different distributors. The authorized ASCII distributors are Ingram Micro, D&H Distributing and Synnex Information Technologies.

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Risa Stolly, president of A-Prompt, a Lehigh Valley, Pa.-based reseller specializing in software licensing, said the new tool is a "huge time-saver, because now we can send out bids to several distributors at one time." Without the tool, A-Prompt would have to spend time checking the prices from multiple distributors, she said.

"We may be shifting business to some distributors who we didn't realize carry the product," said Stolly. "Distributors may also be more aggressive in quoting us prices because there are other competitors in the mix. I am excited to be using it. I am hoping it will lower costs not only in prices for products, but also in the time necessary to quote bids out to different distributors."

Stolly said she also hopes there eventually will be more flexibility in terms of the $5,000 minimum order, adding that she was uncertain about exactly what percentage of A-Prompt's product purchases will go through the reverse auction process. "We will be using it at least several times a week," she said.

Resellers using the reverse auction tool find the products they want, create a bid request that includes information on how soon they need a response, and submit the bid. The bid is then immediately e-mailed to the authorized ASCII distributors, which in turn contact the reseller directly if they decide to respond to it.

D&H has already received several bid proposals from solution providers, said Dan Schwab, vice president of marketing at the Harrisburg, Pa.-based distributor.

"This creates a tool to make the bidding process more efficient. Solution providers don't have to call multiple times to multiple distributors," Schwab said.

BidDesk's effectiveness will be based on whether the distributors look at the bids and respond efficiently, said Chris Scotti, partner and commercial sales manager at solution provider AgniTek, College Station, Texas. "I will use this tool, but I am afraid the distributors are not going to use this because it will make them compete more fiercely. If they make this a priority, this will be an extremely useful tool for us and other resellers," Scotti said.

Schwab said he believes the program won't likely impact distributors' margins because it won't increase the competition to win bids.

"The resellers are already shopping for the best deal. This will make the process more efficient," he said. "It's a good program for [ASCII. It allows them to differentiate themselves for resellers. That's their goal,to create tools to make resellers' jobs easier. I think the reseller will act appropriately."

Bob Huang, CEO of Synnex, agreed.

"We're working with smaller resellers who generally have a little more cost [to do business with. The more efficient the connection, the more efficient the whole process," Huang said.

D&H typically responds to bid proposals within two hours, Schwab said.