The Lowest Price Doesn’t Always Win

The Lowest Price Doesn’t Always Win

By John DiPisa, Founder and CEO, Bid Desk Analytics –

If you read through enough awarded bid tabulations, you begin to realize that there are items offered at a lower price than the winning item.

Usually, it’s an unbranded or alternate product that may not actually be comparable to the product description. Or, it may be a product that was awarded on some previous contract and did not perform as expected. In fact, it can even be a comparable product that simply has not been pre-approved.

The bid process is designed to get the lowest price for a specific item or service; however, it’s the lowest price for the brand that’s specified or preferred

As a manufacturer, there are some best practices that can build your bid business profitably without matching your competitor’s price:

  • Promote the quality of your product directly to the end user, so they ask for your brand.
  • Offer your dealers a fair price and let them compete to offer the lowest price on your brand.
  • Follow the example of companies like Crayola. Crayola wins the lion’s share of crayon bid business – through its dealers – and is arguably the highest price within its group of competing. manufacturers.

While the state, local government and public school contracting business can be lucrative, common missteps and misconceptions – like the lowest bid always wins – can have you leaving money on the table. At Bid Desk Analytics, it is our job to provide the best actionable, predictive and product-specific data, along with an experienced Bid Support Team to help you best act on it.

To learn more, check out our blog, case studies, or simply contact us.

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