When to use Alternative Pricing
Supplier offerings don't always align with what a Project Owner creates into the line item, and Alternative Pricing allows buyers to view a primary bid based on the initial line item setup, and follow up with an altered-term, secondary bid to decide what meets your needs the best. Alternative Pricing functionality allows suppliers to submit different values for the terms included in an item and adjust their price accordingly.
Adding Terms within a Line Item using Alternative Pricing
Project Owners must create their event using a template that has Alternative Response bidding rules enabled. Within the Content section, add a line item to the event, and create a new term that is editable in alternatives by taking the following steps:
- Select the Add Term tab
- Choose Editable by Owner and Participant in the Is term editable in alternatives? field
- Choose Yes to the Can participants create alternative responses.
Alternative Pricing Example
We create a line item for pens of a certain color and quantity. The line item can be created with terms for the color, and specified quantities with units of measure.
When alternative responses are enabled, suppliers must first submit their primary response. After their primary response is accepted, the system will give them the button, Revise/Alternative Response, to create an alternative response.
Their options for creating alternative responses will be based on how rules are enabled for the event, so what they see in the drop-down may differ if different alternative response types have been enabled.
Once the supplier has chosen to revise their response and create an alternative, they must select the line items (not lots) they’d like to use in their alternative response.
In the above, the supplier has chosen both available line items to create an alternative response. In this example, the supplier gave their alternative response a name of ‘Color Change’ to indicate what makes this response different from their primary responses.
The alternative response above provides options if you were to get black pens instead of blue pens. Since these are office supplies, alternatives for a lesser cost may be desirable and alternative bidding allows you to consider this option while collecting pricing for the desired materials.
Event Owner View and Bid Comparison
The system allows for a side-by-side comparison of both the primary and alternative bids from each participant when viewing the Content tab. This view makes it easy for the buyer to analyze the bids that have come in and compare them when making a decision.
In the above, ABC Company has submitted their primary bid as well as an alternative bid called Color Change. Looking in the columns underneath the two submissions from ABC Company, we can see that the price for the black pens is slightly less than the price of the blue pens and that ABC Company is also offering their black pens for more.
Because of alternative bidding, there is now a 70% savings possibility instead of 55% savings, since suppliers could submit an additional bid that didn't exactly meet your requirements at first.
Alternative Pricing Requirements
- Must use Parallel bidding
- Alternative bidding only works with items. Alternative bidding for lots is not supported.