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Industrial Buying
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Hospitals, restaurants, schools and other institutions that buy food and supplies from a wholesale grocer for consumption, not for resale, use industrial buying. Industrial Buying is where goods  and services are purchased specifically to be used in the production of other products. During the course of production, the forms of the “bought-out” products will be converted into products with greater utility, that is, which satisfy wider needs. Organizations in this category include Hospitals, restaurants, schools, other institutions that buy food and supplies from a wholesale grocer for consumption, not for resale, those which are involved in extractive activities (e.g. mining, quarrying, oil drilling); those involved in agriculture, horticulture, forestry and fishing; and those involved in manufacturing. Some materials purchased in industrial buying might be raw materials where other products might be components. The finished products of one industrial organization might be the raw materials of another. For example, a forestry plantation business grows trees, which are eventually felled; its finished products - logs - might be purchased by a timber/saw mill, where they will be considered its raw materials. The finished products of the mill might be cut and planed planks and sheets of wood. Some of that wood might be purchased by a furniture manufacturing business, in whose factory the wood will be considered one of the raw materials on which it depends; the furniture manufacturer is likely also to have to purchase components from other manufacturers, such as those who produce nails, screws, foam, fabrics, and so on, all of which products are needed to produce the factory’s “finished products” - furniture in this case. In most - if not all - instances industrial buyers aim to make profits from their activities, and therefore the efficient and professional purchasing of products at the right prices, of the right qualities, in the right quantities, and at the right times is essential to their endeavors. The products they purchased are considered to be “commercially significant” to their operations.

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