Industrial buying, also known as organizational buying or business buying, is the process of making purchase decisions regarding raw materials, product components, finished goods or services for the intent of profiting from those decisions. Industrial buying requires a different market strategy than regular consumer purchases. Operations managers and business owners must consider the deal that will most benefit the company. If you are interested in learning more about how you can make better job costing decisions during the industrial buying process, you have come to the right place. Below, we have outlined the top six most important steps in the industrial buying process.
Step 1: Recognition
The first step to the industrial buying process is recognition of a need. Before you purchase anything for your company, you should determine what purpose it can fill. Find a problem that can be met with acquired goods and services. Once you have an idea of what you need, you can move on to step two.
Step 2: Specification
This stage involves determining the characteristics, quantity and technical specifications of your purchase. Once you have a need to fill you will have to evaluate what type of product or service would be best for the job. For example, if a machine breaks down at your job should you get the machine fixed or buy a new machine altogether? In order to move on to step three, you must have a clear understanding of what type of industrial purchase you intend to make.
Step 3: Supplier Search
With a product or service in mind, you can begin your supplier search. In this stage of process mapping, you will locate several different suppliers who can provide you with what you need. Make a list of all of the qualified suppliers so that you know all of your options. This is an important step that will help you make the best possible decision.
Step 4: Solicitation
When you have a list of potential suppliers prepared, you can begin to eliminate some options based on the most pertinent factors regarding your needs. Once you have a shortened list, your purchasing department can get in contact with the top suppliers to request proposals from each of them. The suppliers will present specific prices, delivery options, timelines, taxes and more. Then you can begin to analyze the proposals and see what is best for your business.
Step 5: Selection And Ordering
The final step is selection and ordering for point of sale. After analyzing all of the proposals, you will need to choose an official supplier. You can attempt to negotiate the terms of the proposal with them before making a final decision. Then, you can officially place your order. If everything goes well, you may have the option to review your supplier later on. This is an important point because it will allow you to build a relationship with them for future orders.
Industrial buying is the process of purchasing goods or services to fill the needs of a business or organization. By following the steps above, you can make the best purchasing decision for your business. As long as you specify your needs and reach out to quality suppliers, the industrial buying process should go smoothly.
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