It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.
Almost half of companies’ indirect spend
Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In corporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.
For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist). At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.
How spot buying works
That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.
Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.
So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.
Benefits for buyers…
Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.
… and sellers
Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.
So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.
If you are a buyer, how are you managing your spot buys?
If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?
Let me know by commenting below.