What are the types of B2B purchases and their characteristics?

types-of-B2B-purchases

types-of-B2B-purchases

The purchasing sector plays a big role in a company's business. Therefore, to act strategically, professionals who intend to work in the area need to understand the simplest concepts, such as the difference between direct and indirect purchases, as well as how the corporate purchasing cycle works.

In today's post, we'll explain the difference between each of them, the steps that are part of the process and some insights about the importance of automation. Check it out!

Direct purchases vs. indirect purchases

Direct purchasing refers to acquisitions related to a company's core business. For example, a cosmetics company needs packaging to store its formulas, adhesive labels for product labels, and other raw materials related to the production process.

Indirect purchases are geared towards the company's operations, meaning they are not related to the product or service it sells. Examples of indirect purchases include computers for employees, corporate travel, and cleaning and maintenance services for offices.

Because they represent a small portion of the total costs of the area, indirect purchases do not usually have the same relevance as direct purchases, which is a mistake. This is because indirect purchases can also generate high costs for companies if they are not part of a smart strategy.

 

The business-to-business purchasing process

Unlike B2C purchases, B2B purchases tend to take longer to complete due to several factors, such as the careful selection of suppliers – whether the proposals are within the budget, whether they meet legal requirements – and the fact that it involves multiple decision-makers within the company.

Below, see the steps of a corporate purchasing process:

 

B2B purchasing flow steps

1. Purchase requisition

In most companies, before sending a purchase request to the responsible department, the requester must approve the request with their manager.

FOR optimize purchase time, the request must contain, in detail, the specifications of the product or service that the applicant wants to purchase or contract.

 

2. Supplier selection

After the purchase requisition has been approved, the purchasing professional must seek the best suppliers to fulfill the purchase order. More than fulfilling an order, a supplier can become a great partner Sourcing from the company.

At this stage, to avoid damage to the company's image, in addition to considering price and quality, the buyer can assess whether potential suppliers are regular, that is, without any pending tax, labor or fiscal issues.

 

3. Price quote

Once potential suppliers have been shortlisted, the buyer must submit a request for a price quote.

It is at this stage that suppliers inform prices, delivery times and payment methods for the purchase.

 

4. Proposal analysis

Price is important when analyzing proposals to continue negotiations with potential suppliers, but other requirements must be verified.

Do the specifications match the request? Can the supplier meet the deadline? Information like this should also be evaluated.

 

5. Negotiation with suppliers

Negotiating with suppliers is one of the most strategic stages in the purchasing flow. At this stage, it is possible to achieve savings, the indicator of savings in purchases.

Take the opportunity to download the exclusive e-book from Mercado Eletrônico Negotiating with suppliers – everything you need to know about the subject

 

6. Closing the purchase

Closing the purchase is the last step in the flow before it is completed, with the issuance of the purchase order.

The purchase order is issued by the buyer to formalize the order to the supplier.

 

Why automate the purchasing flow?

In the list above, we saw the main characteristics of each stage of the corporate purchasing flow.

The execution of this process, when carried out in an operational and decentralized manner, can take up a lot of professionals' time and harm companies' results.

The digitalization of purchasing processes is already a reality and can transform the routine of professionals, as it frees buyers to act more strategically.

When opting for a e-Procurement solution, which automates the entire purchasing flow, the area's steps are recorded in a single place and can be monitored in real time.

Furthermore, the centralization of information allows for a more analytical view of the entire purchasing process, for more accurate decision-making.

We explain, in a blog post, how e-Procurement automates purchasing management. click to read.

Our B2B purchasing management solutions help companies achieve greater savings, agility, compliance and collaboration in all processes.

 

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