E-procurement or buying electronically

Purchasing platforms offer many advantages for the purchasing process, but still have limited utility value for companies

from Kerstin Sieckmann

Private customers have long been shopping conveniently and cheaply online, but are companies also using this medium to save costs? For the most part, the purchasing department still takes a very time-consuming and cost-intensive approach to procurement. The need is reported, suitable suppliers are sought, offers are obtained, evaluated and then ordered. Suppliers located close to the company are often approached for this purpose. But does it matter whether the paper clip is supplied by the office supplier from the same city or from the other side of the country? Even in Germany, where service is poor, a 24-hour delivery service is now commonplace. But how can you reach as many suppliers as possible with as little effort as possible and easily find the most favorable offer?

This question has been explored by countless providers of purchasing platforms specifically for companies, who are bubbling over with ideas on how to make procurement easier and cheaper. Who doesn’t know them, the ants on e-bay that make it clear to everyone that it is worthwhile for interested parties to join forces to buy a product. In addition to this “powershopping” or “poolbuying”, there are “online promotions”, “price research”, “remaining stock sales”, simple catalog ordering and much more.

Ebaypro.de, wlw-auctions.de, portal-ag.de, ips-einkauf.de…; unfortunately, the number of procurement platforms makes it increasingly difficult to maintain an overview. Here are a few examples:
One provider that has become well-known among many companies, not least through numerous promotions with order vouchers, is
. This platform combines three ordering options: direct catalog ordering, in which favorable prices are negotiated with suppliers in advance; research for individual product or service inquiries; and pool buying, i.e. bringing together as many interested parties as possible to purchase a product. While the selection of products on offer was initially very small, a wide range of items is now available.

carries out supplier research for companies. The buyer selects his requirements from a given range of products and services and describes the item he is looking for precisely using a prepared form. Mondus.de forwards this request to the suppliers cooperating with them. The customer receives the best three offers and then contacts the selected supplier via the Internet. The product range of mondus.de, like mercateo.com, has expanded considerably after initial major restrictions.

Unfortunately, www.buytry.com is now (2019) offline. There you could check whether a product was available at a lower price. After filling out a form to describe the item in detail and indicating a (realistic) target price, the platform operator carried out a price search. If the operator of buytry.com found a cheaper supplier, he received 30% of the cost savings as commission. In addition, buytry.com offered companies the opportunity to completely take over parts of their purchasing via an outsourcing process. This service should also include the entire purchasing monitoring process, such as delivery monitoring, incoming goods inspection, invoice verification and complaints processing.

As a trading center for surplus goods and remaining stock
was set up. It’s worth checking here regularly to find one or two bargains, even if this platform is not suitable for regular purchases.

Works in a similar way
This marketplace offers used machinery and equipment from industry.

When searching for shopping platforms, you also come across some really crazy variants, such as
. Here, goods are not bought but bartered. For example, if a catering service provider needs a new copier, they can use ubarter.com to get in touch with a copier supplier who is currently organizing a company party. So instead of paying with money, snacks are delivered. If no suitable barter partner can be found, the value of the barter item is converted into “barter dollars” and placed in a customer account. This platform is already being used by many companies in the USA to sell (swap) their remaining stock or excess capacity. At the same time, the exchange process protects the company’s liquidity, which can be very important in times of financial bottlenecks.

There are now also search engines that specialize in b2b marketplaces. For example, www.b2b.intereasy.com facilitates the search for the right shopping location by categorizing the platform providers in various ways.

You can spend several hours listing procurement platforms, but it is already clear that not every platform is suitable for every company, and not all products that a company needs are offered by a platform.
Many of the marketplace operators have concentrated on offering C-items because the procurement process is known to be the most cost-intensive in terms of product costs. It is common for customers to be able to store individual order lists on these platforms so that they do not have to re-enter their usual order items each time.
The new procurement channel may be a little cumbersome at first, as you first have to click through the multitude of platforms. And it requires a mental shift on the part of buyers, who now have to rely on someone else to do the supplier research just as well as they can. But then the ordering process, whether it is a one-off item or a recurring requirement, is greatly simplified and takes the strain off purchasing. In this respect, using virtual procurement platforms pays off in two ways: saving costs through cheaper items and saving time during the ordering process.
However, companies can still take some time to convert their purchasing process. The platforms are all relatively new on the market and with the number of operators currently growing rapidly, a selection process in this sector is to be expected. Only those who retain many customers in the long term will have the mass to really influence the price. And only such a marketplace is interesting for companies.
The second major limitation that currently exists in the use of virtual marketplaces is the lack of a link to the company’s purchasing system. Orders placed online still have to be entered into the system manually. The platform that can offer a solution first will be ahead of the competition.

Fig.1: Variants of e-procurement
Fig.1: Variants of e-procurement
Picture of Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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