Outsourcing Procurement: Is It Right for You?

What has led to the massive successes of Amazon, Tesco, and Walmart? In part, it was their smart procurement practices. It enabled them to cut costs while maintaining profit to outpace their competition.

The right procurement is an indispensable part of running a successful company. Many large and small businesses choose to outsource their procurement to gain an edge over their competition and greater profitability. That is why the procurement outsourcing market continues to explode. In fact, it is expected to reach $5.5 billion by 2024.

But how do you know if outsourcing procurement is right for your company? Here are some signs that you should find a procurement expert to help you grow your business.

You Want to Reduce Overhead Costs

Procurement takes time, dedication, and expertise. The cost to hire and train procurement employees is too high for most companies. Also, the expenses that come with adding an entire department to your business can become too much. Outsourcing a company to handle your procurement can save you the extra costs of a dedicated department within your company.

For companies that want a procurement department, outsourcing some of the procurement processes can still save on costs. Outsourcing some of the time-intensive activities, such as supplier assessment and processing, means that your team can spend its resources on core competencies of your company.

You Need More Market Leverage

Leverage is essential to get the best prices on supplies. Most small businesses rarely have the ordering power to demand a lower price from the manufacturer. Procurement companies, however, can leverage several of their customers together to negotiate lower costs for you.

Outsourcing procurement can give you negotiating power that your business would not have on its own. It can ensure that you get the competitive pricing of a much larger company.

You Want Expertise for Procurement

It is difficult to get experts for in-house procurement. It means intensive training and time to get an in-house procurement department to the level of a team of experts at a dedicated procurement company. It also requires resources that many companies cannot afford, such as analysis software and procurement systems.

Procurement agencies have the experience, training, and resources to make sure that you can get the best deal. They research suppliers and have the in-depth market knowledge to make sure that you have the best sources. They are also negotiation experts that know how to get the lowest price for your product.

Most businesses understand how vital data is to make informed decisions but identifying opportunities from large data sets can be time-consuming. However, procurement companies will dedicate the time and have proper software to use data and make sure they are making the best decisions on your behalf.

You Want to Enter a New Region

New regions for sourcing can provide better opportunities for your company to get the supplies you need at a better price. It can be time-consuming and risky to find the right manufacturers for you in a region you’re unfamiliar with, though. Agencies can reduce the risk and time taken to find a qualified manufacturer for you. They have the knowledge and expertise in the area to get what you need.

You Need to Respond Quickly to Market Changes

Procurement is never a one-time activity. Changes in the market and supplier resources mean that companies need to keep a constant eye on procurement. Responding quickly and anticipating changes is critical to business success.

A dedicated procurement company will have systems in place to make sure that your business is minimally affected by any changes to the market. You won’t be stuck without supplies if your manufacturer no longer carries them, for example, because a procurement company can help you quickly source a new supplier. It also allows you to get price reductions right away if the market changes by renegotiating your contract.

You Want to Control What Matters

Outsourcing is not all-or-nothing. Even companies with a dedicated procurement team can benefit from outsourcing part of their process. Buyers can waste a lot of time on parts of the business that doesn’t have a substantial effect on the company. Aspects such as vendor issues, invoice discrepancies, or data analysis can be outsourced.

Instead, you can rely on experts to handle the busywork while your team concentrates on the suppliers or resources that are critical to you. By focusing on the more productive parts of their job, you can have an energized and excited team that isn’t lost in busywork. Outsource the non-strategic categories of procurement and control what you want with your department.

You Want to Streamline Your Business

Many businesses miss out on opportunities to grow and improve because they are mired in their day-to-day responsibilities. Instead, successful entrepreneurs know that they need to streamline and delegate what they can. Then they can focus on finding and growing their opportunities for the future.

A streamlined company enables you to concentrate on the aspects of your business that are important to your brand. You can focus on aspects such as customer service or marketing to grow your business. It can help you be more productive with your time and energy instead of draining the enthusiasm you have for your business.

Outsourcing Procurement for a Better Business

Procurement is an essential part of almost any company. If you’re a product-based business, where and how you get supplies is critical to your profit and product quality because manufacturing all of your own parts and materials is difficult and even impossible in some cases. If you can relate to any of the above statements, consider outsourcing your procurement to create a smooth and streamlined business.


Businesses of any size can benefit from harnessing experts to make sure they have the best supplies. Even if your company has a procurement department, outsourcing part of it could be critical to keeping your business as profitable as possible.

Contact us today to see how we can help you create a world-class supply base with the help of our procurement experts!

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