In today’s economy, procurement managers across all industries are aggressively pursuing new opportunities to reduce costs and incur huge savings in their buying efforts. In the cooperative community, many managers struggle to take advantage of new cost-cutting measures due to growing demands, reduced staff and shrinking budgets. In this free webinar, attendees will discover the benefits of utilizing online reverse auctions and how they can significantly improve a co-op's bottom line, increase savings and gain additional benefits. Attendees will learn how to: Achieve optimal, immediate and sustainable savings Reduce negotiation time by 50-60 percent Utilize a dedicated team of category and sourcing experts Identify and qualify new suppliers to meet stakeholder requirements Maximize competition via complete price transparency

1. TopSource Auction Overview
Prepared for
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2. Agenda
 Overview
 Benefits
 Results
 Considerations
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3. TopSource Overview
TopSource is a wholly owned subsidiary of Topco Associates LLC and provides
not-for-resale (NFR) spend management. For 65 years, Topco has leveraged the
scale with its members in procurement to lower product costs.
For-Resale Programs NFR Spend Programs
 Frozen  Construction
 Dairy/Bakery  Equipment
 Grocery  Hired Services
 HBC/GM  IT Telecom
 Rx  Logistics & Distribution
 Fresh Meat  Marketing
 Branded Meat  Office Products &
 Produce Supplies
 National  Packaging & Supplies
Brands  HR Benefits
 Fuel

4. TopSource Overview
TopSource customers represent over $150 billion in sales collectively. Our customer
network includes grocery retailers, wholesalers, food manufacturers, food services
providers, convenience stores, drug stores and other retail businesses.

5. TopSource Overview
TopSource manages not-for-resale spend on behalf of our wholesale and retail
customers. In addition, TopSource conducts auctions on behalf of all customers
across for-resale and indirect spend.
 Retail and Distribution Strategic Sourcing Professionals
 Broad Scope
Spend  Sourcing Leverage – over $13 Billion in potential indirect
Management spend
 Proven Sourcing Process
 Enabling Technology (Spend Analytics, eSourcing, and
Contract Management)
 Dedicated Auctions team
Auction Center  Robust automated online auction capability
Of Excellence  Mature process and capabilities
 Experience across multiple commodities

6. TopSource Auctions
A reverse auction is a price negotiation in which suppliers selected and invited by
the buyer compete in real time on the internet.
 It is based on transparency of products / delivery / logistics through publication on
the website, and on the transparency of prices quoted by each supplier
 It is NOT a substitute for the sourcing process, but only a single component …
price discovery.
 Auctions transfer the negotiation process from buyers and their suppliers
to suppliers and their competitors.
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7. TopSource Auctions
A well designed auction process will facilitate individual, regional, and national
sourcing opportunities. It should have no impact on other aspects of your
sourcing process.
Auction Process:
 Used for both Direct and Indirect
 Managed as:
 “Stand-alone” - allows for one participant only
 “Mini-aggregation” across participants
 Streamlined process based on participants’ specific requirements
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8. TopSource Auctions: Benefits
On-line auctions deliver significant benefits when compared to conventional
price negotiations, primarily around efficiency and savings.
Sourcing Value Curve
Incremental benefit from
shortened sourcing cycle
 Speed to savings
Cumulative  Optimal pricing
Value
 Increased competition
 Complete transparency
 Price compression
Incremental benefit from
improved pricing
Time
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9. TopSource Auctions: Benefits
Additionally, competitive bidding events allow for multiple award scenarios to be
conducted in a single event, providing better cost data to the Category Manager
and enabling an optimized decision.
Sourcing Value Curve
Incremental benefit from  Factual economic data
specification and volume
optimization  Non-traditional suppliers
 Alternate scenarios
Cumulative  Regional vs. national
Value
 Domestic vs. international
 SKU rationalization
 Common package size
Time
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10. TopSource Auctions: Benefits
The price transparency of auctions allows suppliers to compete more effectively in
markets where they are not typically the low cost provider, thereby driving price
compression.
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11. TopSource Auctions: Suppliers
An increase in the number of vendors that are qualified to bid in an auction will
lead to greater competition, and therefore higher savings.
35%
Typical number of
30% suppliers invited
Average Savings
25%
Adding additional
20%
savings
opportunities
15% by inviting more
suppliers
10%
5%
0% 0 2 3 4 5 6 7 8 9 10 11 12 13
# Participants
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12. TopSource Auctions: Results
Reverse auctions have delivered tremendous savings across a variety of
commodities and services.
Office Products IT
Office Supplies/Toner Laptops/Desktops
Labels Logistics Labels
Plastic Bags Batteries/Chargers Storage Servers
Aluminum Trays Labels Wireless Services
Plastic Pallets
Construction Trailers Hired Services
SkyLights Record Management
Light Fixtures Secondary AP Audit
Carpet Outplacement Services
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13. TopSource Auctions: Results
Office Supplies has proven successful in auction for many companies as the
specifications are easily defined and the spend is typically significant.
Case Study
Product – Office Supplies
No. of Members: 18
No. of Items: 6,500
Baseline Spend: $7,500,000
No of Suppliers: 4
The net result was auction savings of $748,000 (10%) with each member
retaining their incumbent supplier.
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14. TopSource Auctions: Considerations
Products and services best suited for auction exhibit many of the
same characteristics.
 Characteristics that ensure a universal supplier understanding of
products or services
 Clearly defined specifications
 Easily achieved logistical requirements
 Well understood price fluctuations
 Generally accepted terms and conditions
 Characteristics that indicate the likelihood of a competitive market
 Three or more qualified suppliers
 Attractive business opportunity
 Vendors of similar production and delivery capabilities
 Competitive preliminary pricing
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15. TopSource Auctions: Considerations
Auction success is greatly enhanced when the process and parameters are clearly
communicated to all participants. It is important that all suppliers perceive that they
were treated fairly.
 Understand the commodity market & cost
 Clearly define the specifications for bid
 Invite only qualified bidders
 Maintain integrity, ethics, professionalism, fairness
 Publish the rules and follow them
 Provide adequate planning, training and organization
 Understand that reverse auctions are a strategic tool in a
sourcing process, not a silver bullet
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16. Questions??
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17. TopSource Contacts
Chuck Wright - Director, eSourcing
cwright@topsourcellc.com, 781-926-6058
John Latham - Director, Account Management
jlatham@topsourcellc.com, 781-926-6021
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