8 steps of a business organization's purchasing process

Written by frank girard
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8 steps of a business organization's purchasing process
Understand a businesses purchasing process and you may sell more. (Businessman is signing a contract image by asmik from Fotolia.com)

When major purchases are involved, many businesses have a standard purchasing process. If you are a new salesperson who will be selling to businesses, you need to understand the process to help you sell more effectively. Sales managers can use the eight steps in the purchasing process to categorise the stages of sales opportunities.

Need Recognition

The buying process starts with a company realising it has a need for a product or service. A sales person can proactively identify a prospect's needs by analysing an aspect of the company and recommending a purchase. For example, if a company's current computer software can no longer meet regulatory requirements, a salesperson could suggest new software be explored.


What is needed should be clearly described so that a company can make the best decision about what product or solution will fulfil its needs. For computer software, the key features and functions such as reports needed are described.

Qualified Vendor Search

A list of potential suppliers is developed based on a preliminary investigation of the vendor's ability to meet the defined needs. The financial stability and reputation of suppliers is researched.

Request for Proposal

A Request for Proposal, RFP, is prepared and sent to all vendors. The RFP usually includes a cover letter, information about the company requesting the proposal and detailed specifications for what the company wants. The RFP includes a questionnaire about the vendor and outlines when the company can expect delivery and implementation assistance, if required for the item purchased. A standard cost form is also included so that vendors can provide cost information on the same basis.

Proposal Evaluation

Proposals are compared and evaluated to pick an optimum solution. A comparative grid is completed with the vendors being considered listed in columns and the evaluation criteria listed vertically in the first column. Vendors that meet each criterion are checked and the number of criteria met is totalled for each vendor to assist with the selection process.

Vendor Selection

A letter is mailed to all vendors thanking them for providing the proposal and indicating which vendor was selected.

Fulfilment and Installation

The selected vendor provides the item purchased and assists with installation if it is required. In the case of computer software, implementation can include user training, conversion from old software to new software, customisation of the software and preparation of user documentation.

Post-purchase Evaluation

After ordered items have been delivered and installed, the company reviews its performance and provides feedback to the vendor. Modifications in the price paid and the item delivered may be made.

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