E-Procurement Methods

Companies use different methods to procure goods and services depending on what and where they buy, the quantities needed, how much money is involved, and more. The major procurement methods include the following:

1) Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other. This method is used for large-ticket items or large quantities.

2) Buy directly from manufacturers, wholesalers, or retailers from their catalogues and possibly by negotiation. Frequently, a contract implements such a purchase.

3) Buy from the catalogue of an intermediary (e-distributor) that aggregates sellers' catalogues.

4) Buy from an internal buyer's catalogue, in which company-approved vendors' catalogues, including agreed upon prices, are aggregated. This approach is used for the implementation of desktop purchasing, which allows the requisitioners to order directly from vendors, bypassing the procurement department.

5) Buy at private or public auction sites in which the organisation participates as one of the buyers.

6) Join a group-purchasing system that aggregates participants' demand, creating a large volume. Then the group may negotiate prices or initiate a tendering process.

7) Buy at an exchange or industrial mall.

8) Collaborate with suppliers to share information about sales and inventory, so as to reduce inventory and stock-outs and enhance just-in-time delivery.

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