A purchasing manager buys a vast array of products and services for companies and government agencies. Some buyers purchase raw materials for use in manufacturing goods to be sold. Other buyers purchase the things a company needs to operate.
In this free career guide, learn how to have a successful career as a purchasing manager.
Purchasing Manager Summary
- About 42 percent of purchasing managers, buyers, and purchasing agents are employed in wholesale trade or manufacturing establishments.
- Employment is projected to grow 7 percent, which is as fast as the average.
- Opportunities should be best for those with a college degree in engineering, business, economics, or one of the applied sciences.
- Prospects often need continuing education or certification to advance.
Working as a Purchasing Manager
Purchasing managers, buyers, and purchasing agents buy a vast array of farm products, durable and nondurable goods, and services for companies and institutions. They attempt to get the best deal for their company—the highest quality goods and services at the lowest possible cost. They accomplish this by studying sales records and inventory levels of current stock, identifying foreign and domestic suppliers, and keeping abreast of changes affecting both the supply of, and demand for, needed products and materials. Purchasing professionals consider price, quality, availability, reliability, and technical support when choosing suppliers and merchandise. To be effective, purchasing professionals must have a working technical knowledge of the goods or services to be purchased.
There are several major types of purchasing managers, buyers, and purchasing agents. Wholesale and retail buyers purchase goods, such as clothing or electronics, for resale. Purchasing agents buy goods and services for use by their own company or organization.Purchasing agents and buyers of farm products purchase goods such as grain, Christmas trees, and tobacco for further processing or resale. Purchasing managers usually handle more complicated purchases and may supervise a group of purchasing agents. Purchasing professionals employed by government agencies or manufacturing firms usually are called purchasing directors, managers, or agents; sometimes they are known as contract specialists. Purchasing professionals in government place solicitations for services and accept bids and offers through the Internet. Some purchasing managers, called contract or supply managers, specialize in negotiating and supervising supply contracts.
Purchasing specialists who buy finished goods for resale are employed by wholesale and retail establishments, where they commonly are known as buyers or merchandise managers. Wholesale and retail buyers are an integral part of a complex system of distribution and merchandising that caters to the vast array of consumer needs and desires. Wholesale buyers purchase goods directly from manufacturers or from other wholesale firms for resale to retail firms, commercial establishments, and other organizations. In retail firms, buyers purchase goods from wholesale firms or directly from manufacturers for resale to the public.
Buyers largely determine which products their establishment will sell. Therefore, it is essential that they have the ability to predict what will appeal to consumers. If they fail to purchase the right products for resale, buyers jeopardize the profits and reputation of their company. They keep track of inventories and sales levels, check competitors’ sales activities, and watch general economic conditions to anticipate consumer buying patterns. Buyers working for large and medium-sized firms usually specialize in acquiring one or two lines of merchandise, whereas buyers working for small stores may purchase the establishment’s complete inventory.
Evaluating suppliers is one of the most critical functions of a purchasing manager, buyer, or purchasing agent. Many firms now run on a lean manufacturing schedule and use just-in-time inventories so any delays in the supply chain can shut down production and potentially cost the firm its customers. Purchasing professionals use many resources to find out all they can about potential suppliers. The Internet has become an effective tool for searching catalogs, trade journals, industry and company publications, and directories. Purchasing professionals attend meetings, trade shows, and conferences to learn of new industry trends and make contacts with suppliers. They often interview prospective suppliers and visit their plants and distribution centers to assess their capabilities. It is important to make certain that the supplier is capable of delivering the desired goods or services on time, in the correct quantities, and without sacrificing quality. Once all of the necessary information on suppliers is gathered, orders are placed, and contracts are awarded to those suppliers who meet the purchaser’s needs. Most of the transaction process is now automated through use of the Internet.
Purchasing professionals often work closely with other employees in a process called “team buying.” For example, before submitting an order, the team may discuss the design of custom-made products with company design engineers, the problems involving the quality of purchased goods with production supervisors, or the issues in shipping with managers in the receiving department. This additional interaction improves the quality of buying by adding different perspectives to the process.
Work environment. Most purchasing managers, buyers, and purchasing agents work in comfortable offices. They frequently work more than the standard 40-hour week, because of special sales, conferences, or production deadlines. Evening and weekend work also is common before holiday and back-to-school seasons for those working in retail trade. Consequently, many retail firms discourage the use of vacation time during peak periods. Travel is sometimes necessary. Purchasers for worldwide companies may even travel outside the United States.
Training, Other Qualifications, and Advancement
Workers may begin as trainees, purchasing clerks, junior buyers, or assistant buyers. Most employers prefer to hire applicants who have a college degree and who are familiar with the merchandise they sell and with wholesaling and retailing practices. Prospects often need continuing education or certification to advance.
Education and training. Educational requirements tend to vary with the size of the organization. Large stores and distributors prefer applicants who have completed a bachelor’s degree program with a business emphasis. Many manufacturing firms put an even greater emphasis on formal training, preferring applicants with a bachelor’s or master’s degree in engineering, business, economics, or one of the applied sciences. A master’s degree is essential for advancement to many top-level purchasing manager jobs.
Regardless of academic preparation, new employees must learn the specifics of their employer’s business. Training periods vary in length, with most lasting 1 to 5 years. In manufacturing, new employees work with experienced purchasers to learn about commodities, prices, suppliers, and markets. In addition, they may be assigned to the production planning department to learn about the material requirements system and the inventory system the company uses to keep production and replenishment functions working smoothly.
In wholesale and retail establishments, most trainees begin by selling merchandise, checking invoices on material received, and keeping track of stock. As they progress, trainees are given increased buying-related responsibilities.
Other qualifications. Purchasing managers, buyers, and purchasing agents must know how to use various software packages and the Internet. Other important qualities include the ability to analyze technical data in suppliers’ proposals; good communication, negotiation, and mathematical skills; knowledge of supply-chain management; and the ability to perform financial analyses.
People who wish to become wholesale or retail buyers should be good at planning and decision making. They also should have an interest in merchandising. In addition, marketing skills and the ability to identify products that will sell are very important. Employers often look for leadership ability, too, because buyers spend a large portion of their time supervising assistant buyers and dealing with manufacturers’ representatives and store executives.
Certification and advancement. An experienced purchasing agent or buyer may become an assistant purchasing manager before advancing to purchasing manager, supply manager, or director of materials management. At the top levels, duties may overlap with other management functions, such as production, planning, logistics, and marketing.
Regardless of industry, continuing education is essential for advancement. Many purchasing managers, buyers, and purchasing agents participate in seminars offered by professional societies and take college courses in supply management. Professional certification is becoming increasingly important, especially for those just entering the occupation.
There are several recognized credentials for purchasing agents and purchasing managers. The Certified Purchasing Manager (C.P.M.) designation was conferred by the Institute for Supply Management. In 2008, this certification was replaced by the Certified Professional in Supply Management (CPSM) credential, covering the wider scope of duties now performed by purchasing professionals. The Certified Purchasing Professional (CPP) and Certified Professional Purchasing Manager (CPPM) designations are conferred by the American Purchasing Society. The Certified Supply Chain Professional (CSCP) credential is conferred by APICS, the Association for Operations Management. For workers in Federal, State, and local government, the National Institute of Governmental Purchasing offers the designations of Certified Professional Public Buyer (CPPB) and Certified Public Purchasing Officer (CPPO). These certifications are awarded only after work-related experience and education requirements are met and written or oral exams are successfully completed.
Employment as a Purchasing Manager
Purchasing managers, buyers, and purchasing agents held about 527,400 jobs in 2008. About 42 percent worked in the wholesale trade and manufacturing industries and another 10 percent worked in retail trade. The remainder worked mostly in service establishments, such as management of companies and enterprises or professional, scientific, and technical services. A small number were self-employed.
The following tabulation shows the distribution of employment by occupational specialty:
|Purchasing agents, except wholesale, retail, and farm products||295,200|
|Wholesale and retail buyers, except farm products||147,700|
|Purchasing agents and buyers, farm products||14,100|
Job Outlook for Buyers
Employment of purchasing managers, buyers, and purchasing agents is expected to increase 7 percent through the year 2018. Job growth and opportunities, however, will differ among different occupations in this category.
Employment change. Overall employment of purchasing managers, buyers, and purchasing agents is expected to increase 7 percent during the 2008-18 decade, which is as fast as the average for all occupations. Employment of purchasing agents, except wholesale, retail, and farm products—the largest employment group in the industry—will experience faster than average growth as more companies demand a greater number of purchased goods and services. Additionally, large companies are increasing the size of their purchasing departments to accommodate purchasing services contracts from smaller companies. Also, many purchasing agents are now charged with procuring services that traditionally had been done in-house, such as computer and IT (information technology) support in addition to traditionally contracted services such as advertising. Nonetheless, demand for workers may be somewhat limited by technological improvements such as software that has eliminated much of the paperwork involved in ordering and procuring supplies, and the growing number of purchases being made electronically through the Internet and electronic data interchange (EDI). Demand will also be limited by offshoring of routine purchasing actions to other countries.
Employment of purchasing managers is expected to have little or no change. The use of the Internet to conduct electronic commerce has made information easier to obtain, thus increasing the productivity of purchasing managers. The Internet also allows both large and small companies to bid on contracts. Exclusive supply contracts and long-term contracting have allowed companies to negotiate with fewer suppliers less frequently. Still, purchasing managers will be needed to oversee large consolidated purchasing networks, thus spurring some employment growth.
Employment of purchasing agents and buyers of farm products is also projected to have little or no change, as overall growth in agricultural industries and retailers in the grocery-related industries consolidate. Furthermore, automation, offshoring, and the outsourcing of more services are expected to further impede employment growth.
Finally, little or no change in employment of wholesale and retail buyers, except farm products, is expected. In the retail industry, mergers and acquisitions have caused buying departments to consolidate. In addition, larger retail stores are eliminating local buying departments and creating a centralized buying department at their headquarters.
Job prospects. Persons who have a bachelor’s degree in engineering, business, economics, or one of the applied sciences should have the best chance of obtaining a buyer position. Industry experience and knowledge of a technical field will be an advantage for those interested in working for a manufacturing or industrial company. Government agencies and larger companies usually require a master’s degree in business or public administration for top-level purchasing positions. Most managers need experience in their respective field.
|Occupational Title||SOC Code||Employment, 2008||Projected
|Purchasing managers, buyers, and purchasing agents||—||527,400||565,900||38,500||7|
|Buyers and purchasing agents||13-1020||457,100||494,500||37,400||8|
|Purchasing agents and buyers, farm products||13-1021||14,100||14,000||-200||-1|
|Wholesale and retail buyers, except farm products||13-1022||147,700||144,400||-3,300||-2|
|Purchasing agents, except wholesale, retail, and farm products||13-1023||295,200||336,100||40,900||14|
|NOTE: Data in this table are rounded.|
Earnings for Purchasing Managers
Median annual wages of purchasing managers were $89,160 in May 2008. The middle 50 percent earned between $67,370 and $115,830. The lowest 10 percent earned less than $51,490, and the highest 10 percent earned more than $142,550.
Median annual wages of purchasing agents and buyers of farm products were $49,670 in May 2008. The middle 50 percent earned between $37,930 and $67,440. The lowest 10 percent earned less than $28,990, and the highest 10 percent earned more than $96,220.
Median annual wages of wholesale and retail buyers, except farm products, were $48,710 in May 2008. The middle 50 percent earned between $36,460 and $66,090. The lowest 10 percent earned less than $28,710, and the highest 10 percent earned more than $90,100. Median annual wages in the industries employing the largest numbers of wholesale and retail buyers, except farm products, were:
|Management of companies and enterprises||$56,400|
|Wholesale electronic markets and agents and brokers||53,650|
|Grocery and related product merchant wholesalers||49,770|
|Machinery, equipment, and supplies merchant wholesalers||46,250|
Median annual wages of purchasing agents, except wholesale, retail, and farm products, were $53,940 in May 2008. The middle 50 percent earned between $41,670 and $70,910. The lowest 10 percent earned less than $33,650, and the highest 10 percent earned more than $88,790. Median annual wages in the industries employing the largest numbers of purchasing agents, except wholesale, retail, and farm products, were:
|Federal Executive Branch||$73,520|
|Aerospace product and parts manufacturing||64,220|
|Navigational, measuring, electromedical, and control instruments manufacturing||59,040|
|Management of companies and enterprises||58,420|
Purchasing managers, buyers, and purchasing agents receive the same benefits package as other workers, including vacations, sick leave, life and health insurance, and pension plans. In addition to receiving standard benefits, retail buyers often earn cash bonuses based on their performance and may receive discounts on merchandise bought from their employer.