The official business definition of direct vs indirect purchasing refers to the various methods companies use to purchase goods and services. Direct purchasing is the practice of purchasing goods and services directly from the supplier, typically through a direct contract with them. This allows the buyer to have complete control over the supplier selection process, terms, and conditions. In comparison, indirect purchasing involves purchasing goods and services from third-party vendors who act as the middleman between the buyer and the supplier. This method requires less negotiation and control over the supplier selection process, as the third-party vendor will have already pre-negotiated terms with the supplier.
One of the main benefits of direct purchasing is that it gives the buyer more control over the supplier selection process. This increases the chances that the supplier will meet the buyer’s needs, as the buyer will have already established terms that the supplier must meet.