1- Products Traded

2- What can I do in ChemOrbis?

3- What is "cost difference"?

4- What is "converted price"?

5- What is "reserve price"?

6- ChemOrbis Auction Models

7- Auction Phases-Process Scheme

8- Auction Phases-Buyer Auction

9- Auction Phases-Seller Auction

10- Advantages

PP

PVC

PE

PS

ABS

PET

Member companies can open buyer or seller auctions for those products specified in their member profiles.

An auction can either be open to all the member companies which purchase or sell the subject commodity as per their company profiles, or only to a few selected member companies. For the latter, the uninvited members shall not even be aware of the existence of such an auction.

The identities and the offers of bidders are undisclosed to each other. Only the auctioneer can reach the information about the identities and offers of the bidders.

A selection among 2 different auction models can be made.

Every auction consists of two main parts:

Draft Offers:Bidders might not be able to meet all the criteria specified by the auctioneer like the quantity, delivery terms, size breakdown or origin of the product. However they may want to submit their specifications to the auctioneer in order for their specifications to be evaluated by the auctioneer. For this reason, there is a draft offer submission phase for bidders to submit their counter offers to the auctioneer's specifications.
All the details regarding the product, as well as delivery and payment terms, are submitted at this phase without any price being mentioned. These draft offers are evaluated by the auctioneer in the draft offer evaluation phase, by taking into consideration the specifications provided, to determine the "cost differences" for each offer. This also means the approval of the draft offer, allowing it to participate to the auction.

Auction (submitting price offers): Those companies with approved draft offers can participate in the auction and submit their offers. Only prices can be submitted in this phase.

For each auction more than one draft offer, with different specifications (such as product origin, quantity, payment terms etc), can be submitted by each participant. However the auctioneer has the option not to accept changes in product specifications payment and delivery terms.

The bidders can improve their prices within this period without any limitation.

The offers and the identities of the bidders are disclosed only to the auctioneer.

The bidders can follow up the performance of their offers during the auction. This information is only available for their offers. No access to offers of other participants is available.

In the draft offer evaluation phase the auctioneer compares the specifications of the draft offers with the specifications originally required. During this phase criteria such as;

Quantity

Quality

Origin

Currency

Duty Ratio Rate

Delivery terms

Payment terms

are evaluated, taking into consideration factors like the reliability of the bidders, in order to determine the cost difference associated with the draft offers that will participate the auction A detailed cost difference calculation wizard is provided which enables system to calculates the cost difference according the following criteria:

Delivery Term Difference (DTD)
Payment Term Difference (PTD)
Duty Tax Rate (DTR)
Other Constant Values (OCV)
Other Cost Ratio (OCR)
Currency Rate (CR)

Converted Price: (CR) x (Original Price) x (1 + PDT + DTR + OCR) + OCV+PTD

The converted price is the real value of bid submitted with respect to terms demanded. It calculated by appliying the cost diffences entered during draft offer period according to follwing formula:

Converted Price: (CR )x (Original Price) x (1 + PDT + DTR + OCR) + OCV + PTD

Delivery Term Difference (DTD)
Payment Term Difference (PTD)
Duty Tax Rate (DTR)
Other Constant Values (OCV)
Other Cost Ratio (OCR)
Currency Rate (CR)

IMPORTANT NOTE:

In order to maximize the benefits of the system, cost differences should be determined with utmost attention so that the offers by the bidders can be compared and evaluated accordingly.

It is only valid for automatically awarded auctions.

During the draft offer evaluation phase, after assigning cost differences for each draft offer approved to attend the auction, a reserve price is determined for automatically awarded auctions.

The reserve price is the highest acceptable converted price for buyer auctions and the lowest acceptable converted price for seller auctions in automatically awarded auctions. It shows the limit of acceptance of the auctioneer. For an automatic auction to be awarded, at least one of the converted prices must exceed or be equal to the reserve price.

In other words, the reserve price is the limit of an acceptable purchase/sales price plus the cost difference. The crucial point here is the fact that the converted price should exceed or be equal to the reserve price for an automatic auction to be awarded. Therefore, cost differences should be taken into consideration while determining the reserve price.

IMPORTANT NOTE:

In order to maximize the benefits of the system, cost differences should be determined with utmost attention so that the offers by the bidders can be compared and evaluated accordingly. At this point, the setting of the reserve price at a true-to-market level shall help to get the best possible results from the auction.  

Under the manually awarded auction model the initiative belongs to the auctioneer. The auctioneer has the flexibility of choosing which company(ies) to award the auction to, without any constraint of price as well as awarding the auction to none if the desired results are not obtained.   

The auction is awarded automatically in favor of the best converted price once the reserve price is met or exceeded. This model boosts the degree of competitiveness between the bidders. Even if the reserve price is met before the closing time of the auction, the duration shall continue to allow the system to reach the best possible price.

The auction opening form can be reached from the left menu under "Create Auction / Buyer Auction". The form consists of 4 different parts. Under the 1st part (Product selection) the product to be purchased is selected.

The 2nd part (Product specifications) consists of detailed information regarding the likes of quantity, product type and sizes. Information for the heading "Product specifications & packaging" can be specified in the free-field area provided, attached as a file or filled out in the standard forms.

The 3rd part (Payment & Shipment) gives the details regarding the desired payment and shipment terms.

The 4th and the last part is where the auctioneer can specify the criteria regarding the auction itself. Under this part; auction starting and closing time & date, auction awarding criteria, evaluation period and the member companies to be invited to the auction are selected.

Commencement of draft offer collection: Draft offer collection period automatically starts when the auction form is approved by the user by entering the authorization code.

Closing of draft offer collection period: Draft offer collection period can last for 2 days minimum,and 6 months maximum. Therefore the deadline chosen for the draft offer collection period should comply with these time intervals.

Draft offer evaluation period: Draft offer period can be 1 hour minimum, 72 hours maximum.

Commencement of bidding period: Bidding period automatically commences right after the draft offer evaluation period. Therefore it is calculated by the system by adding the duration of draft offer evaluation period to the closing date of the draft offer collection period.

Closing of bidding period: The closing of the bidding period can be chosen as minimum 1, maximum 24 hours later than the bidding commencement date.

Evaluation period can be between 1 to 24 hours.

Auction awarding criteria can be chosen as "manual" or "automatic".

Negotiation phase: Following the bidding period auctioneer may invite 2 or 3 participant to a ngotiation phase. At the auction initiation stage, the auctioneer can determine if there will be a negotiation at the end of bidding period by choosing one of the options; "negotiation allowed", "negotiation not allowed" or "availability of negotiation to be decided at the end of bidding period".

Auction participants can be all the members that are associated with the sales of the requested material or minimum 2 specific member companies selected by the auctioneer. The member companies which are not invited for the subject auction will not even be aware of such an auction.

The auction information can be approved right away or can be saved for later approval by the administrator of the auctioneer. The authorization code should be supplied in order to validate and open the auction. Invited bidders are informed of the opening of the auction via e-mail thus the draft offer collection period starts.  

The draft offer collection period starts when the auctioneer enters and validates the auction details with its authorization code.

Bidders must submit their draft offers before the commencement of the draft offer evaluation period. Otherwise they will not be able to participate in the auction.

If the auctioneer uses the option not to accept changes in product specifications and/ or shipment & delivery terms the bidders are assumed to propose the given specifications in their draft offers for related term(s). The companies that can not fulfill the given specifications may not attend the auction simply by not submitting draft offers.

Bidders can submit more than one draft offer with different specifications for the same product, without quoting prices.

During the draft offer collection period the auctioneer can follow up the developments under the "My Scheduled Auctions" heading and the bidders can get the related information under the "Invited Auctions" heading.

Draft Offer Evaluation period begins right after the Draft Offer Sending Period and lasts for 1 hour minimum, 72 hours. maximum

The auctioneer evaluates each offer according to various criteria and defines a cost difference for each one according to advantages or disadvantages of each draft offer. The draft offers are approved by entering these cost differences*. Draft offers, cost differences of which are not defined within this period, are assumed to be rejected by the auctioneer, and these offers can not participate in the bidding period.

For Automatically Awarded Auctions, the auctioneer should also define the reserve price** within this period.

*cost difference is a positive or negative value or a ratio defined for each draft offer to homogenize the different specification combinations in each offer in order to be able to compare them on the same basis.

** reserve price is the highest acceptable converted price for buyer auctions and the lowest acceptable converted price for seller auctions in automatically awarded auctions.

The participants, whose draft offers were approved in the previous step, are invited to the bidding period.

Auctioneer and the participants can monitor the auctions from "My Ongoing Auctions" and "Auctions I Bid" respectively.

The participants can only bid for the draft offers that have been approved by the auctioneer in the "Draft Offer Evaluation Period".

The bid prices can be improved without limitation

In the Automatically Awarded Auctions the bids equal to or below the reserve price* are shown in blue. The positon of the bids can be monitored under bid rank column.

In manuel and automatic auctions the best price can not be repeated.

The ranking is done according to the converted price*.  

*cost difference is a positive or negative value or a ratio defined for each draft offer to homogenize the different specification combinations in each offer in order to be able to compare them on the same basis.

**reserve price is the highest acceptable converted price for buyer auctions and the lowest acceptable converted price for seller auctions in automatically awarded auctions.

In Manually Awarded Auctions, the auctioneer can award the auction to one or more bidders during the decision period. The auctioneer can also choose not to award the auction to any of the participants.

In the Automatically Awarded Auctions, if the reserve price* is reached, the auction is automatically awarded to the participant who offered the best converted price*. If the reserve price is not reached, the auction is finalized manually in the decision period by the auctioneer.  

In the manual or automatic auctions with negatiation phase***, the negotiations between the auctioneer and the bidders are conducted on-line within 1,5 hours. The negotiation periods are as follows:  

The offers during the negotiation phase can be a "Firm Offer" or an "Offer Subject to Re-confirmation". The firm offers are binding, if accepted by the bidder. At least one of the first counter offers must be a firm offer.

The bidder receiving a "Firm Counter Offer" or a "Counter Offer Subject to Re-confirmation" may accept this offer, change it or repeat his last offer. The auctioneer needs to re-approve a counter offer which is subject to re-confirmation for the offer to be binding, even though the counter offer is accepted by the bidder. 

The negotiation phase can be concluded by the auctioneer at any time during the negotiation phase. If the auctioneer doesn't conclude the auction during the negotiation phase, he will have an evaluation period of 1 hour after the end of the negotiation phase. 

Even if a transaction is concluded during negotiation period, the auctioneer may continue to negotiate with the remaining bidder(s). If he chooses not to and prefers to conclude the auction, he can do so by clicking on the "Conclude" button at the bottom of the page. In that case, offers accepted during the negotiation phase will appear with an unchangeable " P" next to them. The auctioneer may also choose additional offers if he wants. 

The participants are informed about the auction results via e-mail.  

*cost difference is a positive or negative value or a ratio defined for each draft offer to homogenize the different specification combinations in each offer in order to be able to compare them on the same basis. price".

**reserve price is the highest acceptable converted price for buyer auctions and the lowest acceptable converted price for seller auctions in automatically awarded auctions.

*** In automatic auctions , if the reserve price* is reached, the auction is automatically awarded to the participant who offered the best converted price an the auction ends without negotiation even if the auctioneer decalared there would be a negotiaion phase following bidding period.

The form can be reached through the "Create Auction /Seller Auction" link from the menu on the left of the screen. Similar to buyer auction the form consists of 4 parts.

The draft offer collection period proceeds similar to buyer auction.
If the auctioneer uses the option not to accept changes in product specifications and/ or shipment & delivery terms the bidders are assumed to propose the given specifications in their draft offers for related term(s). The companies that can not fulfill the given specifications may not attend the auction simply by not submitting draft offers.

Draft offer approval period for seller auctions proceeds similar to the buyer auction.

*reserve price is the highest acceptable converted price for buyer auctions and the lowest acceptable converted price for seller auctions in automatically awarded auctions.

Except for the fact that the bids are improved by increasing the bid price, seller auctions are similar to the buyer auctions.

In the automatically awarded seller auctions bids equal to or above the reserve price* are highlighted in blue. The positon of the bids can be monitored under bid rank column.

*reserve price is the highest acceptable converted price for buyer auctions and the lowest acceptable converted price for seller auctions in automatically awarded auctions.

Similar to Buyer Auction

In automatically awarded auctions the auction will automatically be awarded to the highest converted* bid if the reserve price** level is passed during the auction. If the reserve price isn't reached, then the auctioneer may award the auction to one or more bids during the evaluation period.   

*cost difference is a positive or negative value defined for each draft offer to homogenize the different specification combinations in each offer in order to be able to compare them on the same basis. The auctioneer defines a cost difference for each draft offer approved during the "Draft Offer Approval Period". For example, if the cost difference of a draft offer is specified as +10$, when the owner of the offer bids 100$ for it during the bidding period the system will automatically convert it into 110 $ (100+10=110). This price which is evaluated by adding the cost difference to the original bid price (110$ in the example) is called "converted price".

**reserve price is the highest acceptable converted price for buyer auctions and the lowest acceptable converted price for seller auctions in automatically awarded auctions.

High competition

Advantageous and real market prices

New business contacts

Synchronous bidding by multiple firms

Saving sources and time