Purchasing Agents Do a Lot More Than Just Place Orders

Without supplies, there can be no supply chain. That’s why purchasing agents are so important. They’re the professionals who do whatever it takes to ensure there are enough raw materials, component parts, semi-finished goods, and packaging to meet the demands of manufacturers, sellers, and consumers. Some people assume that purchasing (sometimes called procurement) is merely about finding the cheapest suppliers and placing orders. There’s a lot more to it than that.

Yes, purchasing agents have to make smart, economical purchasing decisions and handle the practical matters involved in procurement, such as invoicing and price negotiation. They also have to:

• Build reliable supplier networks
• Make buying decisions that meet the diverse needs of each point on the supply chain
• Solve problems related to defective materials or late deliveries as they arise
• Help firms reach specific revenue goals

Purchasing agents have a role to play in business operations, production, and distribution. At companies that deal in or use hazardous materials, they’re also responsible for safety compliance.

How can one person do all that? In this article, we answer the question what is a purchasing agent? and cover:

• What do purchasing agents do?
• How does someone become a purchasing agent?
• What skills do purchasing agents need?
• Where do purchasing agents work?
• What is the average purchasing agent salary?
• What is the typical advancement path for purchasing agents?
• Do buyers and purchasing agents do the same job?
• Are there certifications for purchasing agents?
• Why should someone check out this job?

What do purchasing agents do?

These supply chain professionals make important buying decisions on everything needed to produce goods for consumers and keep companies up and running. Procurement is especially important in manufacturing, where the cost of raw materials, component parts, and packaging can make or break a company. However, purchasing agents also work in institutions like hospitals, schools, and government agencies that need to regularly purchase operations-related consumable supplies.

Procurement is a balancing act. Purchasing agents don’t just find and contract with whatever suppliers can deliver the necessary parts fastest. Shipping speed is only one of the factors that come into play. Purchasing agents have to consider:

• The cost and the quality of materials
• The price of shipping and shipping speeds
• The availability of warehouse space
• The impact a shortage of materials might have on productivity

Under the guidance of purchasing managers, purchasing agents work to build and maintain a stable supply network. They also:

• Attend trade shows
• Authorize payments
• Confirm receipt of orders
• Evaluate suppliers
• Find new suppliers
• Log invoices and payments
• Maintain sales records
• Manage relationships with suppliers
• Monitor contracts
• Monitor inventory levels
• Negotiate contracts with suppliers
• Prepare purchase orders
• Research new industry trends in pricing
• Return unacceptable goods
• Resolve shipment errors
• Review price proposals
• Schedule incoming deliveries
• Solicit bid proposals
• Submit orders to suppliers
• Track orders
• Track product performance
• Transfer inventory between warehouses
• Verify deliveries
• Verify stock

Depending on the company’s size, a purchasing agent may handle all of a firm’s procurement needs or specialize in the procurement of one component part, raw material, or type of equipment. A purchasing agent working at a small business might evaluate all the different suppliers, research the lowest possible prices, process requisitions, and contract negotiation for all materials. They might even develop the company’s procurement strategy.

A purchasing agent employed by a vast hospital network, on the other hand, might be responsible for working with medical supply vendors but not suppliers that sell goods related to facilities management. They’ll have specialized technical knowledge of the goods they source. The same is true for purchasing agents who work in manufacturing environments where hazardous materials are routinely used.

How does someone become a purchasing agent?

The education requirements for purchasing professionals have changed over the years. There was a time when it was possible to become a purchasing agent with an associate’s degree or even a high school diploma by starting in an apprenticeship or as an assistant and taking advantage of on-the-job training. Today, more employers are looking for candidates with bachelor’s degrees in business, supply chain, logistics, engineering, or related disciplines.

Most purchasing agents pursue one of the following degrees before starting their job search:

• Bachelor of Science in Logistics and Supply Chain Management
• Bachelor of Science in Operations Management
• Bachelor of Science in Supply Chain Management
• Bachelor of Science in Business Analytics
• Bachelor of Business Administration
• Bachelor of Business Administration in Supply Chain Management

Why aren’t there procurement degrees on the list? Because there aren’t any at the bachelor’s degree level and only a handful at the master’s degree level. Webster University offers an MA in Procurement and Acquisition Management; it’s is one of the few standalone procurement degrees available in the United States.

The good news is that most employers don’t expect applicants for purchasing agent jobs to have master’s degrees. A person’s work experience and professional background often matter more than academic experience in supply chain careers. Ryan Hunt, founder and CEO of oil field supply chain company Rig CallOut, offered up this advice to aspiring purchasing agents in a Quora thread about what advancement paths in procurement: “Start in sales. Learn how salespeople tick… Learn about things that affect the cost of what you’re buying. What logistics challenges could enhance your own supply chain. To do these things, you need to know how it works so you can read through all the BS a sales rep will tell you when you begin in procurement.”

Once someone has worked as a purchasing agent for a few years, however, going back to school for a Master of Science in Supply Chain Management or Supply Chain MBA in a full-time or part-time program can help them advance into more senior SCM positions.

What skills do purchasing agents need?

Purchasing agent is an interdisciplinary role that involves accounting, data analytics, logistics, operations, and supply management. Core business competencies and analytical skills can only take a purchasing agent so far, however. Successful purchasing agents also need to have well-developed soft skills like:

• Communication skills, because procurement is all about relationship management and teamwork.
• Negotiation skills, because buyers have to be able to source the best possible supplies at the best possible prices.
• Networking skills, because building a network of suppliers is a critical part of procurement.
• Problem-solving skills, because keeping supply chains running smoothly can mean finding and fixing inefficiencies.
• Research skills, because a big part of a purchasing agent’s job involves finding new sources of raw materials and new production partners.

Where do purchasing agents work?

You can find purchasing agents working in manufacturing companies across sectors, retail and e-commerce companies of all sizes, warehousing and distribution centers, government agencies, and even research and science labs. Companies in the private sector and agencies and organizations in the public sector all have procurement needs. Every firm that manufactures products, deals in finished goods, or processes and distributes raw materials needs purchasing agents. Large organizations like the US military need purchasing agents, too. According to the U.S. Bureau of Labor Statistics, the sectors that employ the most purchasing agents are manufacturing, wholesale trade, and the government.

What is the average purchasing agent salary?

The average purchasing agent salary is about $48,000, with top earners bringing in closer to $60,000 and purchasing managers earning as much as $118,000.

How much an individual purchasing agent actually earns in this role depends on many factors, including location and employer size. Unfortunately, entry-level purchasing agents are some of the lowest-paid professionals in supply chain operations—a discipline usually known for its high salaries. There are lots of ways to earn more in procurement, however. With hard work and time, some purchasing agents are promoted to senior purchasing agent, purchasing manager, and director of procurement.

One’s industry can also play a role in how much purchasing agents earn. Purchasing agents in hospitality, retail, food services, agriculture, and arts and entertainment tend to make the least. In contrast, those in government jobs, the energy sector, manufacturing, and retail operations usually earn the most. Transitioning between industries can increase a purchasing agent’s earning potential by $30,000 or more.

What is the typical advancement path for purchasing agents?

There are a lot of career pathways in procurement because supply chains are so complex. In general, however, people enter the field right out of a bachelor’s degree program or transition from sales, business administration, or another area of SCM into entry-level purchasing positions like purchasing agent, buyer, procurement analyst, or procurement specialist.

From there, a motivated purchasing agent might advance to an assistant purchasing manager position or even be promoted to purchasing manager. What the advancement opportunities for purchasing agents look like after that largely depend on the company. At small firms, purchasing manager might be a terminal position. However, bigger companies will have positions like sourcing director, director of materials management, commodities director, director of procurement, or vice president of procurement in the supply chain management hierarchy. The top position in purchasing is chief procurement officer.

Do buyers and purchasing agents do the same job?

This is a question without a definitive answer. Some people make the case that purchasing agents work in production while buyers work in retail, or that a buyer may have a broader list of responsibilities.

The reality is that there are no set naming conventions for roles in procurement. Companies give purchasing professionals all kinds of titles. According to Charles Dominick, who wrote about titles in purchasing on the Next Level Purchasing Association blog, there aren’t set titles in this discipline. “If there’s one thing that is true about our profession, it’s that we have very few standard naming conventions. We tend to use different words to refer to the exact same thing. Think purchasing/procurement/supply management. Or sourcing/competitive bidding/tendering. Or suppliers/vendors/contractors. Or… well, you get the idea.”

Some companies employ materials buyers or commodities agents. Others have purchasing associates or just purchasers. There are firms with procurement specialists and firms with sourcing agents. Some even have replenishment specialists. Purchasing agents can step into any of these positions.

Are there certifications for purchasing agents?

No law or regulation requires that purchasing agents be certified. Many employers don’t actively look for certified purchasing agents. You can work in this field without any certifications.

Even so, professional purchasing certifications and general supply chain management certifications can make a career in procurement more lucrative. According to some estimates, certified purchasing agents earn up to 13 percent more than their uncertified peers. According to one Next Level Purchasing Association survey, purchasing professionals with the Senior Professional in Supply Management credential earned an average of $20,028 more. Some of the most common certifications for procurement professionals include:

• The Certified Purchasing Professional (CPP) designation
• The Certified Purchasing Professional Manager (CPPM) designation
• The Certified Green Purchasing Professional (CGPP) designation
• The Certified Professional Purchasing Consultant (CPPC) designation
• The Certified Public Procurement Officer designation

Why should someone check out this job?

First, because procurement is essential. Without purchasing agents, there would be no raw materials to feed the factories and no retail products on store shelves to satisfy shoppers. In this role, you’ll see the impact of your efforts and know that you’re making a difference in your colleagues’ lives and in the lives of consumers.

Second, because supply chain jobs are still relatively easy to get with just a bachelor’s degree. A whole lot of manufacturing jobs go unfilled each year, and many of those openings are for positions in purchasing.

And finally, because a job in procurement can take you in many directions. As a purchasing agent, you’ll interface with people from sales, R&D, finance, marketing, quality assurance, engineering, and other departments. You’ll also end up with a considerable number of industry contacts. Your experience and network can lead to more senior positions in SCM or in an entirely different direction.

Admittedly, purchasing agent isn’t one of the higher-paid supply chain management positions. However, it can be the first rung on the ladder that leads up to some of the highest-paid supply chain management positions.

Questions or feedback? Email editor@noodle.com