Procurement is the acquisition of goods or commodities by a company, organization, institution, or a person. This simply means the purchase of goods from suppliers at the lowest possible cost. The best way to do this is to let the suppliers compete with each other so that the expenses of the buyer are kept at a minimum.
Procurement usually involves a bidding process in which the bidders or sellers quote their prices and the buyer accepts the lowest possible bid. This is the most efficient and cost effective method of procuring goods or services if the quality of the goods meets the buyers' requirement.
The process of procurement usually begins when the procurer starts to search the market for bidders. After identifying the suppliers, a request for bids, proposals, quotes, and information can be made. However, direct contact with bidders can also be made instead of advertising the above requests.
After selecting the suitable bidders, a quality check is essential in order to confirm the suitability of the goods in question. The next step would be negotiation of the terms, conditions, quality, and delivery schedules. Logistics and payment are the next two important processes that determine the safe delivery and the payoff of goods.
If this whole process is carried out on the Internet, then it can be called "e-procurement." The huge market that is accessible on the Internet provides numerous and unprecedented opportunities for sellers and buyers alike. This makes it a very popular tool for researching and consulting for the procurement of goods or services.
The whole process of procurement should be carried out in compliance with the existing laws in order to avoid any legal hassles. There are many consultants on the Internet who provide education and advice regarding the procurement process.
The process of procurement may differ slightly from one company to another, but the process is usually symbiotic in nature. It benefits both the buyer and the seller.
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