No matter what you call them—RFQs, RFPs, online auctions, reverse auctions or bids—they all spell bad news for the adhesives and sealants industry. These exercises will ultimately do irreparable harm to the industry as a whole.
From what I can determine, most of these requests are made by large corporations, many with multiple sites, though that is not always the case. A lot of these companies are held by large private equity groups whose sole purpose is to drive down costs in an effort to make their businesses look attractive to buyers. Some of these bidding processes are run internally through corporate buyers, while others are implemented by outside professionals who make a living out of the savings they generate for their clients through these invitations. Make no mistake, the process’ sole purpose is driving down costs for the customers at the expense of the suppliers. Let’s take a closer look at one of these deals.