Startup Tips For Outsourcing Procurement

Posted on: 9 February 2015

If you are a business owner who has realized the benefits of outsourcing, you may be interested to get involved with outsourcing procurement. This may be one of the most challenging areas to outsource because it involves giving up some of the control when it comes to some of the most integral parts of your business. However, when paired with the right source, these methods can lead to unforeseen benefits. If you're feeling leery about outsourcing procurement, use some of the tips below to help get you started with minimal risk.

Negotiate Beneficial Terms

There are various methods of payment when it comes to this type of outsourcing. You can opt for a savings percentage plan where the company you hire gets a percentage of the money saved, a flat rate plan where you know what you are going to pay out every month, or you may even want to come up with your own method.

The flat rate method works well if you decide upon a savings goal that has to be reached to be within the confines of the contract. On the other hand, a savings percentage payment plan can be a great motivator for your procurement source When choosing between the two options, consider your long term plan. Anything is better than paying the full cost of procurement right now, but you need to set timely goals and learn which payment method is going to serve your company best in the long run.

Avoid the Core

When you decide which procurements you want to hand over for outsourcing, avoid starting off with the core products of your business. You can always add those later.

  • Try focusing on just one category and its end-to-end operations. Stock up a bit and put your original source on a temporary hold to see how things work out. In this manner you won't run out of stock or lose your original source if things don't work out as planned, but you'll also have the chance to see if your sourcing and procurement company can do what it promises.
  • You don't just have to focus on products. You can also focus on tasks, relieving some of the burden of your current set-up, without putting products on the line. Start with a small area, like the details of a small marketing campaign. This helps you avoid putting current accounts at risk, while allowing you to try out a new method of procurement.

Any time you hand over some element of control of your business to someone else, expect some anxiety. At the same time, keep in mind some of the benefits that your company can reap using outsourcing procurement. Change is always a challenge, but it can also be of great benefit to you and your company.

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