Everything you need to know about categories of purchase - Trends4tech
categories of purchase

Purchase is taken as a general method of buying services and goods. The process of purchasing differs from one organization to another. But there also exist some general steps that are very important to understand. The overall process starts with the requirements, demands, and needs keeping in mind the categories of purchase.

This is also taken as a physical part or whole of the service. On the other hand, a requisition is produced which also lists the requirements in some cases. It also comes up with the requirements specification. 

A later request for proposal or request for quotation is raised. Then the suppliers sent their quotations to RFQ. Finally, the review is taken where the best offer is handed over to the purchase order depending on the availability, quality, and total prices. 

Categories of purchase:

There exist different types of categories of purchase and a few main ones are listed below.

  • Standard purchase orders consist of an only one-time buy
  • Blanket purchase orders consist of agreements based on specific terms and conditions. Moreover here the quantity, date, and amount are not known.
  • Planned purchase orders consist of an agreement that relies on a specific item keeping in mind the approximate date.

Most of the purchase categories these days are normally dependent on the terms and conditions. It then forms the contractual agreement of the transaction.  As soon as the supplier delivers the goods or products then the customers keep the track record of the item. 

Later, the invoice is generated and sent by the supplier which then crosses checks the details with the purchase order. 

The document is also attached which tells which product or goods have been delivered. The payment of the product, good, or service is paid to the supplier.

Different categories of purchase:

The whole process concerned is not the same especially depending on the purchase categories you are making. Given below examples discusses different categories.

  1. Personal Purchases
  2. Merchantile Purchases
  3. Industrial Purchases
  4. Government or institutional Purchases
  • Personal Purchases:

Here the customer or consumers purchases certain items, good, and service for their consumption. This makes them fall into a very important category of purchase. They are ultimately fruitful in improving the economy of the country.

However, through the purchase of its goods, the economy becomes more reliant on them.

  • Mercantile Purchases:

It is one of the most important categories of purchase and is led by middlemen with the attention to resale to meet the requirements and needs of the customer/ consumer.

Retailers, wholesalers, and agents fall under these specific purchase categories. They also come up with their procedures and channels for the distribution of goods, products, or services. 

It also plays an important role in the success of any organization.

  • Industrial Purchasing:

Buyer buys products or goods just for the conversion of raw material. Moreover, it also contains supplies, components, spare tools, machines and equipment, and other office materials.

    It is one of the best categories used by different businesses to buy either products or services. This purchase category cannot be actuated. It is also regarded as an important part of the purchasing system. For example, an effective inventory system that monitors existing stock also plays an important part for companies what they need to buy.

    The purchase activities of industrial buyers also consist of some important steps such as the decision-making process. Consumers take buying decisions based on the mental stages such as need recognition, research information, evaluation, purchase decision, and many more. 

Thus in the industrial market, the buying decision process includes sequential stages. 

  • Government or institutional Purchases:

This is one of the most important categories of purchase for all of us.

Institutions and government purchases are very important and crucial. They also play a key role in the purchasing of goods, services, or items in bulk for public utilities.

Government purchases are also dependent on spending money on infrastructure projects and later paying to the civil service. It is also helpful in buying office materials and maintaining public equipment and buildings. 

Transfer of payments is not included in this category. Overall government purchases are an important part of the country’s gross domestic product. According to the recent facts and figures by the Keynesian theory of economics, government purchases are an important tool to improve the weak economy of the country.


Purchase or purchasing is the procedure or process of ordering, and receiving goods and services. In other words, it is taken as a subset of the procurement process. In general, purchasing is a method of ordering goods such as request, approval, creating a purchase order, and receiving goods.

The motive of different categories of purchase is to not only procure raw material at the lowest price but also to remove the cost of the total products, goods, or services. To ensure this, a lot of parameters are present.

This guide entails everything you need to know about categories of purchase.

By admin

Leave a Reply