Purchasing agents work for businesses and other large organizations, such as hospitals, universities, and government agencies. They buy raw materials, machinery, supplies, and services required for the organization. They must consider cost, quality, quantity, and time of delivery. Purchasing managers and agents hold approximately 520,000 jobs in the United States.
Purchasing Agent Career History
Careers in the field of purchasing are relatively new and came into real importance only in the last half of the 20th century. The first purchasing jobs emerged during the industrial revolution, when manufacturing plants and businesses became bigger. This led to the division of management jobs into various specialties, one of which was buying.
By the late 1800s, buying was considered a separate job in large businesses. Purchasing jobs were especially important in the railroad, automobile, and steel industries. The trend toward creating specialized buying jobs was reflected in the founding of professional organizations, such as the National Association of Purchasing Agents (now the Institute for Supply Management) and the American Purchasing Society. It was not until after World War II, however, with the expansion of the U.S. government and the increased complexity of business practices, that the job of purchasing agent became firmly established.
The Job of Purchasing Agents
Purchasing agents generally work for organizations that buy at least $100,000 worth of goods a year. Their primary goal is to purchase the best quality materials for the best price. To do this, the agent must consider the exact specifications for the required items, cost, quantity discounts, freight handling or other transportation costs, and delivery time. In the past, much of this information was obtained by comparing listings in catalogs and trade journals, interviewing suppliers’ representatives, keeping up with current market trends, examining sample goods, and observing demonstrations of equipment. Increasingly, information can be found through computer databases. Sometimes agents visit plants of company suppliers. The agent is responsible for following up on orders and ensuring that goods meet the order specifications.
Most purchasing agents work in firms that have fewer than five employees in their purchasing department. In some small organizations, there is only one person responsible for making purchases. Very large firms, however, may employ as many as 100 purchasing agents, each responsible for specific types of goods. In such organizations there is usually a purchasing director or purchasing manager.
Some purchasing agents seek the advice of purchase price analysts, who compile and analyze statistical data about the manufacture and cost of products. Based on this information, they can make recommendations to purchasing personnel regarding the feasibility of producing or buying certain products and suggest ways to reduce costs.
Purchasing agents often specialize in a particular product or field. For example, procurement engineers specialize in aircraft equipment. They establish specifications and requirements for construction, performance, and testing of equipment.
Field contractors negotiate with farmers to grow or purchase fruits, vegetables, or other crops. These agents may advise growers on methods, acreage, and supplies, and arrange for financing, transportation, or labor recruitment.
Head tobacco buyers are engaged in the purchase of tobacco on the auction warehouse floor. They advise other buyers about grades and quantities of tobacco and suggest prices.
Grain buyers manage grain elevators. They are responsible for evaluating and buying grain for resale and milling. They are concerned with the quality, market value, shipping, and storing of grain. Grain broker-and-market operators buy and sell grain for investors through the commodities exchange. Like other brokers, they work on a commission basis.
Purchasing Agent Career Requirements
Most purchasing and buying positions require at least a bachelor’s degree. Therefore, while in high school, take a college preparatory curriculum. Helpful subjects include English, business, mathematics, social science, and economics.
Although it is possible to obtain an entry-level purchasing job with only a high school diploma, many employers prefer or require college graduates for the job. College work should include courses in general economics, purchasing, accounting, statistics, and business management. A familiarity with computers also is desirable. Some colleges and universities offer majors in purchasing, but other business-related majors are appropriate as well.
Purchasing agents with a master’s degree in business administration, engineering, technology, or finance tend to have the best jobs and highest salaries. Companies that manufacture machinery or chemicals may require a degree in engineering or a related field. A civil service examination is required for employment in government purchasing positions.
Certification or Licensing
There are no specific licenses or certification requirements imposed by law for purchasing agents. There are, however, several professional organizations to which many purchasing agents belong, including the Institute for Supply Management, the National Institute of Government Purchasing, and the American Purchasing Society. These organizations offer certification to applicants who meet their educational and other requirements and who pass the necessary examinations.
The Institute for Supply Management offers the accredited purchasing practitioner and certified purchasing manager designations. The National Institute of Government Purchasing and the Universal Public Purchasing Certification Council offer the certified public purchasing officer and the certified professional public buyer designations. The American Purchasing Society offers the certified purchasing professional and certified professional purchasing manager designations. Although certification is not essential, it is a recognized mark of professional competence that enhances a purchasing agent’s opportunities for promotion to top management positions.
Purchasing agents should have calm temperaments and have confidence in their decision-making abilities. Because they work with other people, they need to be diplomatic, tactful, and cooperative. A thorough knowledge of business practices and an understanding of the needs and activities of the employer are essential, as is knowledge of the relevant markets. It also is helpful to be familiar with social and economic changes in order to predict the amounts or types of products to buy.
Exploring Purchasing Agent Career
If you are interested in becoming a purchasing agent, you can learn more about the field through a summer job in the purchasing department of a business. Even working as a stock clerk can offer some insight into the job of purchasing agent or buyer. You may also learn about the job by talking with an experienced purchasing agent or reading publications on the field such as Purchasing magazine. Keeping abreast of economic trends, fashion styles, or other indicators may help you to predict the market for particular products. Making educated and informed predictions is a basic part of any buying job.
There are approximately 520,000 purchasing managers and agents (wholesale, retail, farm products, and other) currently working in the United States. They work for a wide variety of businesses, both wholesale and retail, as well as for government agencies. Employers range from small stores, where buying may be only one function of a manager’s job, to multinational corporations, where a buyer may specialize in one type of item and buy in enormous quantity. Nearly every business that sells products requires someone to purchase the goods to be sold. These businesses are located nearly everywhere there is a community of people, from small towns to large cities. Of course, the larger the town or city, the more businesses and thus more buying positions. Larger cities provide the best opportunities for higher salaries and advancement.
Students without a college degree may be able to enter the field as clerical workers and then receive on-the-job training in purchasing. A college degree, though, is required for most higher positions. College and university placement services offer assistance to graduating students in locating jobs.
Entry into the purchasing department of a private business can be made by direct application to the company. Some purchasing agents start in another department, such as accounting, shipping, or receiving, and transfer to purchasing when an opportunity arises. Many large companies send newly hired agents through orientation programs, where they learn about goods and services, suppliers, and purchasing methods.
Another means of entering the field is through the military. Service in the Quartermaster Corps of the Army or the procurement divisions of the Navy or Air Force can provide excellent preparation either for a civilian job or a career position in the service.
In general, purchasing agents begin by becoming familiar with departmental procedures, such as keeping inventory records, filling out forms to initiate new purchases, checking purchase orders, and dealing with vendors. With more experience, they gain responsibility for selecting vendors and purchasing products. Agents may become junior buyers of standard catalog items, assistant buyers, or managers, perhaps with overall responsibility for purchasing, warehousing, traffic, and related functions. The top positions are head of purchasing, purchasing director, materials manager, and vice-president of purchasing. These positions include responsibilities concerning production, planning, and marketing.
Many agents advance by changing employers. Frequently an assistant purchasing agent for one firm will be hired as a purchasing agent or head of the purchasing department by another company.
How much a purchasing agent earns depends on various factors, including the employer’s sales volume. Mass merchandisers, such as discount or chain department stores, pay among the highest salaries. According to 2004 U.S. Department of Labor data, earnings for purchasing agents, except wholesale, retail, and farm products ranged from less than $29,640 for the lowest 10 percent to more than $79,710 for the top 10 percent. Median salaries were $47,680. Wholesale and retail buyers (except farm products) had median earnings of $42,230 in 2004. Their salaries ranged from less than $24,380 to $79,340 or more annually. Purchasing agents and buyers, farm products had median annual earnings of $43,720 in 2004.
In addition to their salaries, buyers often receive cash bonuses based on performance and may be offered incentive plans, such as profit sharing and stock options. Most buyers receive the usual company benefits, such as vacation, sick leave, life and health insurance, and pension plans. They generally also receive an employee’s discount of 10 to 20 percent on merchandise purchased for personal use.
Working conditions for a purchasing agent are similar to those of other office employees. They usually work in rooms that are pleasant, well lighted, and clean. Work is year-round and generally steady because it is not particularly influenced by seasonal factors. Most have 40-hour workweeks, although overtime is not uncommon. In addition to regular hours, agents may have to attend meetings, read and prepare reports, visit suppliers’ plants, or travel. While most work is done indoors, some agents occasionally need to inspect goods outdoors or in warehouses.
It is important for purchasing agents to have good working relations with others. They must interact closely with suppliers as well as with personnel in other departments of the company. Because of the importance of their decisions, purchasing agents sometimes work under great pressure.
Purchasing Agent Career Outlook
The number of purchasing agents is likely to grow more slowly than the average for all occupations through 2014, according to the U.S. Department of Labor. Computerized purchasing methods and the increased reliance on a select number of suppliers boost the productivity of purchasing personnel and have somewhat reduced the number of new job openings. But as more and more hospitals, schools, state and local governments, and other service-related organizations turn to professional purchasing agents to help reduce costs, they will become good sources of employment. Nevertheless, most job openings will replace workers who retire or otherwise leave their jobs.
Demand will be strongest for those with a master’s degree in business administration or an undergraduate degree in purchasing. Among firms that manufacture complex machinery, chemicals, and other technical products, the demand will be for graduates with a master’s degree in engineering, another field of science, or business administration. Graduates of two-year programs in purchasing or materials management should continue to find good opportunities, especially in smaller companies.