How to Start a Procurement Company that Makes Millions

A procurement business is a hidden money-spinner for anyone that knows how to go about it.

You could be making millions in earnings just by helping companies source and optimize the purchase of raw materials and equipment.

Most large manufacturing companies you could think of today employ the services of procurement companies to purchase most of their materials.

And they pay huge money for that service.

You could start your own procurement company on a smaller scale, build your Network and experience, and then grow from there.

Here’s how to start.

Identify your Niche

You have to start from where you can thrive, and that begins with identifying your procurement niche.

What kind of procurement do you want to indulge in?

Raw materials for manufacturing? Equipment supplies? Last-mile procurement? Retail supplies?

You have to identify and choose the niche where you can deliver your best.

Build your Network

Procurement is all about leveraging your supply network to create value for clients, and vice versa.

Hence, you have to build a network of both suppliers and clients.

If you want to procure for the food processing industry, then you need to have contacts with a wide range of farmers to fulfill the client’s demands.

More so, you’ll need this network because most of the procurement would be done based on reimbursement contracts, which means that you would be paid after supplying the commodity.

Create Resources

Next up, you’ll need to create resources to make your procurement company thrive in the chosen niche.

Do you need a credit facility to help you adequately fund your procurement activities? Then get one.

Do you need a storage/preservation facility to store raw materials in off-season or for last-mile delivery? Get one.

Do you need to build a transport network to gather materials from multiple locations and prepare them for supply? Get it done.

These are some of the resources that you have to create to enable a thriving procurement company that makes millions in earnings.

Find the Right Contract

Now that you have your procurement system in place, it’s time to start pitching companies to patronize you.

Most companies would probably already have procurement companies they deal with.

So, you may need to start on a smaller scale, or start with supplying scarce commodities to companies with a deficit.

You could also seek subcontracts with large contractors who already have established relationships with large industries.

Your goal should be to find the right contract that helps you leverage the value of your supply network, and then grow from there.