Purchasing by using electronic support is referred to as e-procurement. In addition to reverse auctions just discussed, e-procurement uses other mechanism. Two popular ones are group purchasing and desktop purchasing.
In group purchasing, the requirements of many buyers are aggregated so that they total to a large volume, and may merit more seller attention. Once buyers’ orders are aggregated, they can be placed on are verse auction, and a volume discount can be negotiated. The orders of small buyers usually are aggregated by a third-party vendor, such as Consarta.comand Shop2gether.com. Group purchasing is especially popular in the health care industry (see
In this variation of e-procurement, known as desk-top purchasing, suppliers’ catalogs are aggregated into an internal master catalog on the buyer’s server, so that the company’s purchasing agents (or even end users) can shop more conveniently. Desktop purchasing is most suitable for maintenance, replacement, and operations (MRO) indirect items, such as ofﬁce supplies. (The term indirect refers to the fact that these items are not inputs to manufacturing.) In the desktop purchasing model, a company has many suppliers, but the quantities purchased from each are relatively small. This model is most appropriate for large companies and for government entities