Why do you need procurement strategy as a small business
Feb 10, 2025
A structured RFQ (Request for Quotation) strategy is crucial for small businesses looking to optimize their procurement process. This approach helps businesses save time, reduce costs, build stronger supplier relationships, and ensure compliance. Let’s dive into why having a clear RFQ strategy is a game-changer for your business.
Published By AuraVMS
What is an RFQ?
A formal process where businesses request pricing, terms, and services from potential suppliers. It helps businesses compare multiple suppliers and make informed decisions.
What are the benefits of having a good RFQ strategy or procurement strategy
1. Optimize Procurement Efficiency
A clear RFQ strategy reduces the time spent on sourcing and comparing quotes. Automation tools like AuraVMS can speed up the RFQ process by maintaining a clean repository of your requirements, of your supplier responses, sending follow-ups and reminders, and collecting all required details in an easy and clean comparable format. Letting you focus on finding new suppliers and negotiating better with existing suppliers.
Standardized RFQs reduce the risk of mistakes or losing out on opportunities during procurement.
2. Save Costs and Improve Profit Margins
A good procurement strategy makes sure that you get high quality quotations from multiple suppliers. And without putting in much effort of following up with existing suppliers, asking for essential informations or documents.
And once you have the supplier responses on a system, you can easily compare them across multiple parameters like price, quality, payment terms, shipping terms, delivery TAT, return policy, etc.
And ultimately, that saved time and increased margins significantly increase your cashflow, your working capital and other fundamental business metrics. That is why even small buyers prefer affordable tools like AuraVMS.
3. Strengthen Supplier Relationships
Once your suppliers realise, that your procurement is governed by a software and not an individual's favours and feelings, they trust you more. They know that you are fair and just and they can offer their best deal to you.
With all suppliers' data being digitsed, you build a long term partnership and rapport with your suppliers, because you will know who is quoting most often, who is giving best prices, best terms etc.
Plus as mentioned previously, you can focus your time in finding more suppliers and engaging your suppliers personally!
4. Ensure Compliance and Minimize Risk
Once you start standardising your RFQs (request for quotations) and responses, you can organise and pull all procurement data at any time. This increases compliance of your system during any 3rd party audits or even for your own team, you can have better oversight.
Additionally, if your products, quality requirements, terms etc are digitzed, it is impossible to make mistakes while creating RFQs or responses. This alone will provide you enough ROI for subscribing to a software like AuraVMS.
5. Enhance Decision-Making with Data
Finally, the buzzword "data". Once your procurement data is in your system, you can do very extensive and reliable business planning.
For example, if you see that price of a product has been mostly stable, then you probably don't need to stock up in inventory. Or if a supplier has kept his payment terms not favorable to you, you can go and negotiate!
With tools like AuraVMS, you will see which supplier responds to your RFQs, how often, and what is the quality of their responses. This shows you which suppliers are engaged with you, and which needs more effort from you.
Conclusion
In conclusion, by making a good procurement strategy, and using products like AuraVMS, you can save time, increase your margins, increase cashflow, reduce working capital, improve supplier relations and much more!
Ready to improve your procurement process? Start using AuraVMS today. It starts at just $4.99 per month, and you will receive 100% refund if it does not serve the purpose for you!
Sign up at auravms.com/pricing
