Procurement process: how B2B buying works, step by step, for buyers a...

The B2B procurement process is the sequence a company follows to buy something from another company: define the need, research the market, decide how to buy, ask suppliers for information and proposals, evaluate them, negotiate, sign a contract, set the supplier up for payment, and manage the relationship until renewal. Small purchases may skip most of these steps. Larger or riskier ones usually go through all of them, with more people involved at each step.

If you are the buyer, this page helps you plan the process. If you sell to businesses, it shows what is happening on the other side and what you can do at each step.

The process in one picture

CIPS, the procurement and supply professional body, publishes a 13-step procurement and supply cycle that runs from specification through analysis, strategy, market engagement, documentation, supplier selection, tender, evaluation, contract, delivery, performance, relationship management and asset management. Most B2B purchases compress that into the nine steps below. The names differ from company to company, but the order is similar.

Step	What the buyer does	What a seller can do
1. Define the need	Agree the problem, requirements and budget	Help the buyer describe the problem, not just your product
2. Research the market	Find possible suppliers and alternatives	Be findable, with clear public information
3. Decide how to buy	Direct purchase, quotes or a formal tender	Ask which route they are using and who approves
4. Request information	Send an RFI or hold supplier calls	Answer precisely and ask clarifying questions
5. Request proposals	Issue an RFP or RFQ with requirements	Respond to what was asked, in their format
6. Evaluate	Score price, capability, capacity and risk	Have security, finance and reference material ready
7. Negotiate and contract	Agree terms, KPIs and price	Know your limits and who signs on your side
8. Set up and order	Add the supplier to finance systems, issue a purchase order	Send tax and banking forms promptly
9. Manage and renew	Track performance, review, decide on renewal	Report on the KPIs you agreed

A worked example

Suppose a manufacturer with a few hundred employees wants software to track quality inspections across two plants. A three-person startup sells that kind of software. The example is hypothetical, and each step below shows both sides.

Steps 1 to 3: need, market and route

The buyer starts by defining the need. CIPS advises involving cross-functional stakeholders at this stage to build a high-level specification, and notes that stakeholders who are heard early are more likely to support the change later. In the example, the quality manager, plant managers, IT and finance each have requirements. IT cares about single sign-on and data location; finance cares about the three-year cost.

Next the buyer looks at what the market offers, including whether to build or buy. CIPS lists this market analysis and make-or-buy decision as its second step. Then the buyer decides how to buy. CIPS suggests a competitive tender where there is real competition and the buyer is well positioned; a buyer with one possible supplier needs a different approach.

For the seller: these are the steps where you have the most influence and the least visibility. Buyers often research before contacting anyone. Clear public pages on what you do, who it is for and how pricing works help you get onto the list. When you do talk to the buyer, ask who else is involved and whether a formal process is planned.

Steps 4 and 5: information and proposals

Before a formal request, many buyers send a request for information (RFI) to understand suppliers. CIPS describes the RFI as a way to learn suppliers' size, capabilities, financials, strengths and weaknesses, and to decide which suppliers should receive a request for quotation. In US federal buying, the FAR notes that responses to RFIs are not offers and cannot be accepted to form a contract. Private purchases are not governed by the FAR, but the distinction is useful: an RFI gathers information, and the proposal that follows is the offer.

The buyer then sends a request for proposal (RFP) or request for quotation (RFQ) with the detailed specification and a deadline. How to write a request for proposal covers the buyer's side of that document.

For the seller: answer the question that was asked, in the format requested, by the deadline. If a requirement is unclear, ask through the contact the buyer named. Where a requirement does not fit your product, say so plainly and describe the workaround. A buyer who discovers the gap later tends to trust the rest of your answer less.

Step 6: evaluation

This is where most of the buyer's work happens. CIPS's guidance on evaluating tenders describes a team with financial, technical, purchasing and sometimes legal expertise checking each bid against the published criteria. Its checklist covers financial assessment (all costs included, extra costs identified, payment terms), technical assessment and capacity to deliver. It also stresses treating every bidder the same way and documenting decisions.

In practice, a software purchase often adds a security review, a legal review of the contract and reference calls. Vendor selection covers building a scorecard and running reference calls.

For the seller: evaluation is slow partly because several reviewers each need something from you. Prepare these before you are asked: a standard security questionnaire answer set, your insurance certificates, sample contract terms and two or three customers willing to take a reference call.

Steps 7 and 8: contract and setup

After selection comes negotiation and contract award. CIPS recommends putting measurable KPIs into the contract so both sides know what success looks like. Once the contract is signed, the buyer's finance team sets the supplier up for payment and usually issues a purchase order. In the US, that setup often includes asking the supplier for a Form W-9; the IRS says the form is used to give your correct taxpayer identification number to someone who must file an information return about payments to you.

For the seller: ask early who signs the contract and what the buyer's finance team needs to pay you. A deal can be approved and still wait weeks because a form or bank detail is missing.

Step 9: performance and renewal

CIPS recommends reviewing contract performance at agreed intervals against the KPIs in the contract, discussing how the relationship is working, and setting the next review date. Near the end of the term, the buyer decides whether to renew, renegotiate or return to step 1.

For the seller: the renewal decision is shaped by what the buyer can see. Report on the agreed KPIs without being asked.

Learning how a specific buyer's process works

Every company runs its own version of this process, and the details that matter, such as who approves spending above a threshold or how long security review takes, are rarely written down publicly. The quickest way to learn them is to ask people who do the work: procurement managers, IT reviewers or finance staff in the industry you sell to.

Instant Expert can find people who match a description like "procurement managers at mid-size manufacturers." You review who it finds, it sends your invitations, and you pay only for calls that get booked. Directory pages such as procurement professionals in industrial automation and procurement professionals in enterprise SaaS are a place to start. Interviewing B2B buyers, users and champions covers what to ask.

Your next step: write down the nine steps for one deal you are working on, buyer or seller side, and mark who owns each step and what they need.