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Shopping online for the things your business needs

Purchasing needed goods and services online for your business can have a positive impact on your bottom line:

• By helping you get more value for your money,
• By widening your choice of suppliers, and
• By significantly reducing transaction processing costs.

Perhaps you still do most of your purchasing through sales representatives, telephone calls or faxed orders. During 2001, you may want consider buying some of the things you need through the Internet.

Internet shopping made easy
Whether your business is small, medium or large, some of your favorite suppliers may already have Web sites where you can select what you need. In addition, you will find that the Internet can greatly increase your choices.

If you use a “purchasing card” as a payment standard that saves time and administrative costs and provides expense approval and reporting systems, structured spending limits and detailed data for negotiation and tax purchases, you can also get preferred customer status with suppliers of a wide variety of products and services, including computers, payroll processing, postage and shipping, travel arrangements, dining and entertainment.

Pre-set controls and processing guidelines
Before adding e-purchasing to your company’s buying channels, you should set up internal systems that clearly spell out controls over the purchasing process. This not only empowers employees with accurate knowledge of your guidelines, but it frees the purchasing staff to spend more time on vendor negotiations and commodity management.

The added bonus: transactions move faster and cost less. Approvals are minimal, you automatically ensure compliance with established company policies, and restrict purchases to preferred suppliers.

Results released in December of a study of  “E-procurement Trends at Mid-Sized Companies” found that companies that decide to move more of their purchasing activities to the Internet are more likely to have streamlined their purchasing processes.

Both e-purchasers and those who buy through conventional channels cite similar criteria when selecting a vendor – price is the primary factor for consideration (68 percent and 74 percent), followed by quality (38 percent and 43 percent).

The survey of 500 purchasing decision-makers in mid-sized companies also indicates online purchasing is growing rapidly in the segment, and that e-purchasers are using multiple electronic channels, including one-to-one supplier connections (Electronic Data Interchange), suppliers’ Web sites and procurement software with electronic catalogs.

January 4, 2001

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