The Art of Initiating a Digital Tender

Explore how to use our sales and procurement digital tenders to facilitate win-win transactions, improve negotiation strategies, and learn how they can play a pivotal role in market competition by enhancing transparency and price discovery.

By Ronald K. O'Brien II, President of Nui Markets North America

In the dynamic global dairy market, a win-win transaction occurs when buyers and sellers negotiate a mutually beneficial price for goods or services, resulting in a profitable, transparent, and sustainable exchange. Price discovery, achieved through effective procurement and sales transactions, is crucial for cultivating such mutual gains. By introducing free market competition, both parties benefit from increased transparency.

Procurement tenders, also known as "reverse auctions," are initiated by buyers who specify product requirements and desired prices within set parameters, aiming to secure favorable margins. Pre-approved suppliers participate in determining the market price, with offers typically at or below the buyer's set price. Conversely, sellers conduct "sales tenders" by inviting pre-approved buyers, starting with a low initial offering price to attract interest and encouraging higher bids, fostering a symbiotic exchange.

Unbeknownst to many, buyers and sellers engage in pseudo-tenders daily when requesting quotes or contacting suppliers or customers. However, these traditional transactions often suffer from inefficiencies due to outdated communication methods, leading to delays and inconsistencies. Moreover, these "blind tenders" lack visibility, making it difficult for parties to compare their standings with competitors.

Nui Markets addresses these challenges by offering "Nui Enterprise" digital solutions for sellers to initiate sales tenders and "Nui Marketplace" for buyers to initiate procurement tenders in real-time, facilitating transparent and efficient transactions.

Step 1:

For newcomers to digital trading, starting with a simple procurement or sales tender is an excellent way to test the waters. Experiment with pricing for specialty or surplus products or explore regional pricing dynamics. Digital tenders offer a low-risk avenue for market exploration and price discovery.

Step 2:

Once you're comfortable with the process, integrate digital tenders into your sales and procurement strategy with consistency and discipline. Leveraging the real-time benefits of digital platforms enhances credibility and encourages wider participation, ultimately strengthening both buying and selling positions. It's essential to commit to digital trading and avoid offering alternative sales channels, especially on the same day or week, to encourage counterparties to participate and compete.

Step 3:

Digital tenders serve as both transactions and foundations for establishing price discovery and refining pricing data. Define product specifications and regions to confirm and adjust pricing data effectively. To get started, focus on a manageable segment of your business and commit to digital trading over a defined period. Develop targeted tenders to gauge effectiveness and expand this approach across your business segments as success unfolds. Every tender, regardless of its outcome, provides valuable insights, empowering participants to adjust strategies and enhance efficiency over time. By consistently leveraging digital platforms like Nui's, businesses can optimize transactional efficiency and strengthen their market position through informed decision-making and adaptive strategies.  By embracing digital procurement and sales tenders, businesses can cultivate mutually beneficial exchanges, drive efficiency, and thrive in the ever-changing global dairy market.