Difference between Buying and Sourcing

Key difference: While both the terms are synonyms in a sense, there is a significant difference between the terms. The term buying is most commonly used in a casual sense, such as “I went out to buy groceries for dinner.” However, the term sourcing has more of a formal, businesslike context to it.

Buying and Sourcing are two terms that are often used interchangeably. While, both the terms do mean to acquire something against payment, usually monetary in nature, there are some differences between the two terms.

Dictionary.com defines buy as:

  • To acquire the possession of, or the right to, by paying or promising to pay an equivalent, especially in money; purchase.
  • To acquire by exchange or concession: to buy favor with flattery.
  • To hire or obtain the services of: The Yankees bought a new center fielder.
  • To bribe: Most public officials cannot be bought.
  • To be the monetary or purchasing equivalent of: Ten dollars buys less than it used to.

Whereas, sourcing is defined as:

  • To give or trace the source for: The research paper was not accurately sourced. The statement was sourced to the Secretary of State.
  • To find or acquire a source, especially a supplier, for: Some of the components are now sourced in Hong Kong.
  • To contract a manufacturer or supplier: Many large companies are now sourcing overseas.
  • To seek information about or consider possible options, available personnel, or the like: a job recruiter who was merely sourcing.

While both the terms are synonyms in a sense, there is a significant difference between the terms. The term buying is most commonly used in a casual sense, such as “I went out to buy groceries for dinner.” However, the term sourcing is rarely used in the same context. One never hears, “I sourced the groceries for dinner.” This is mainly because the term sourcing has more of a formal, businesslike context to it.

The term sourcing is mainly used in businesses or factories, where the process of buying is highly strategic in nature. Sourcing includes finding of new suppliers for new products, getting RFQ for the raw materials, evaluating them and continuing business with the suppliers. Sourcing also includes releasing the purchase order for the goods and services sources, and tracking delivery schedules and the shipment of goods until they arrive on site.

Essentially, the main job of the product sourcing department is to find the cheapest, best quality products and services, while making sure that the products meet the company’s guidelines, as well as the budget. At times, the products and services may be sourced from the international market.

Comparison between Buying and Sourcing:

 

Buying

Sourcing

Definition

Buying is to obtain something in exchange for money or goods.

Sourcing to find the correct products at the best prices.

Type

Verb

Verb

Inference

Casual/Informal

Business/Formal

Examples

  • I bought a new pair of shoes today.
  • The Smiths are buying a new house.
  • We need to buy a new car.
  • The store was having a sale, we bought many items.
  • I need to buy the books for this semester.
  • We sourced the consignment of shoes for the new line.
  • We sourced the parts to complete the car.
  • Mike just sourced an entire shipment of books.

Image Courtesy: ascendworks.com, ellmoreconsultancy.co.uk

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