Indirect procurement

Okay kiddo, let's imagine that you want to buy a toy. You go to a toy store and choose the toy you like. You pay the money to the cashier, and the toy is yours. This is called direct procurement, where you buy things that you need directly from the store.

Now, let's say that your mom wants to buy some materials for her business, like pens, papers, or cleaning supplies. She can't just go to a store and buy everything she needs. Instead, she needs to talk to different companies and negotiate prices with them. This is called indirect procurement because she is not buying things directly for personal use; instead, she is acquiring things for her business.

Indirect procurement is when a company buys goods and services that are not related to the core business, like software, office supplies, or consulting services. It can also include things like transportation, maintenance, or legal services. These things are important for the company to function properly, but they are not part of the main products or services that the company sells.

So, the next time you see your mom buying things for her business, you can impress her by saying, "Mom, you're doing indirect procurement!"