Procurement is the overarching function that describes the activities and processes to acquire goods and services. Distinct from purchasing, procurement involves the activities necessary to establish requirements, sourcing activities such as market research and vendor evaluation, and negotiation of contracts. Purchasing refers to the process of ordering and receiving goods and services. It is a subset of the procurement process.

The buy-side marketplace is a model in which organizations attempt to procure needed products or services from other organizations electronically. A major method of procuring goods and services in the buy-side model is the reverse auction.

The buy-side model uses EC technology to streamline the procurement process. The goal is to reduce both the costs of items procured and the administrative expenses involved in procuring them. In addition, EC technology can shorten the procurement cycle time.

Procurement by using electronic support is referred to as e-procurement. E-procurement uses reverse auctions, particularly group purchasing. In group purchasing, multiple buyers combine their orders so that they constitute a large volume and therefore attract more seller attention.

In addition, when buyers place their combined orders on a reverse auction, they can negotiate a volume discount. Typically, the orders of small buyers are aggregated by a thirdparty vendor, such as the United Sourcing Alliance.