How Bombay saves big in sourcing materials through online reverse auctions

By letting its suppliers of POS tape, packaging and other operational materials bid on its procurement contracts through online reverse auctions, multi-channel home furnishings retailer The Bombay Co. is saving more than 27% of the cost of sourcing materials, says Kay McCarthy, director of purchasing.

Bombay is participating in reverse auctions–in which it publishes procurement needs online to let multiple suppliers bid on a contract–through Sorcity.com. The auctions, which charge suppliers a fee but are available at no cost to the buyer, can also save days spent on processing each procurement contract, and enables Bombay to maintain more supplier relationships at an overall lower cost, McCarthy says.

Bombay has used Sorcity.com for several years, realizing most of its savings in the procurement of items like point-of-sale tape, McCarthy says. But the retailer expects to expand its savings to other goods with plans for multi-year arrangements to use the reverse auctions to source corrugated cartons, office supplies, light bulbs, store fixtures and visual props as well as other possible items, she adds.

McCarthy says Bombay chose Sorcity for its ease of use as well as its savings in procurement. “We have been using Sorcity.com for several years because it doesn’t come with the baggage of software or consulting services,” she says. “And there’s no cost to us.”