purchase order definition

Small businesses struggle to stay afloat in a vast sea of competition. There's always the threat of drowning in debt or getting pushed aside by corporate giants.

For those who want to venture into business, the first concern is always to generate revenue. But generating revenue requires more than just a plan. It demands a collection of tangible actions to make business activities run smoothly.

First, you must find a supplier to get your products from. This is where purchased orders can help you. As a small business, you want to minimize the risks of losing money and safeguard your orders.

You may be wondering, what is a purchase order? If you’re new to the world of entrepreneurship, this term may baffle you. But if you have a bit of business knowledge, you may confuse it with an invoice.

To help you get started, we’ll cover the purchase order definition, its importance, and when you need it. We’ll also walk you through the process of creating an ecommerce website using Strikingly’s all-in-one business solution.

What is a Purchase Order?

Let's start with answering this fundamental question: what is a purchase order? A purchase order is a document that legally binds a buyer to pay a specific amount for a certain number of orders to a seller.

To put it simply, purchase order definition refers to issuing a document that signals a buyer’s obligation to pay. For example, if you’re selling baby clothes and want to order 200 pieces of mittens from a big supplier, you as the buyer will issue a purchase order to place your order from the supplier. Purchasing in advance can help you price your products better and get better profit from the conduct of your business.

From this, a purchase order is both advantageous to the buyer and seller. From the buyer’s perspective, they won’t have to pay for any order until their order arrives. For the seller, they can guarantee that the buyer pays for their orders, thus avoiding non-payment.

The purchase order definition is also not the same as an invoice. By definition, an invoice is issued by the seller. It is also given after purchase. This document also serves as a confirmation that the goods have been delivered.

On the other hand, purchase orders are created before the purchase and outline the order details (types of products, amount, etc.). It also includes proposed payment details.

Information Included in a Purchase Order

The following information must be present according to the purchase order definition:

  • A purchase order number (to track delivery and payment)
  • The products and/or services that the buyer purchased
  • Specifics of the product/s (SKUs, model, etc.)
  • Quantity per type of product
  • The price of each product
  • The date when the order should be delivered
  • The place where the order must be delivered to (specific location)
  • Billing address (the address where the invoice will be sent upon confirmation of receipt of order)
  • Any applicable discounts
  • Payment terms

When Do You Need a Purchase Order?

Now that you know the purchase order definition, you must also be well-versed on when you need to issue a purchase order.

You must issue a purchase order whenever you make large transactions. For example, you may need to order large quantities or certain products if you’re expanding your store. For transactions that involve large financial risks, you need a purchase order.

Purchase orders may not be necessary for payments that you frequently make. For example, since you pay your rent or electricity every month, you won’t need a purchase order for that. It is already expected that you must pay these bills every month.

Importance of Purchase Order to Your Business

After knowing the purchase order definition, you must also know how important purchase orders are to build an online business. Here are some benefits you can derive from purchase orders as a small business owner:

  • Improves your inventory management
  • Enhances your financial management and funds allocation
  • Become better at budgeting your cash inflow and resources
  • Encourages faster delivery times
  • Get legal protection (purchase orders are legally binding documents that pose an obligation to meet)
  • Make order tracking more convenient, easier, and faster
  • Avoid problems when auditing your finances
  • Makes transactions easier for the vendor/s

Once you have a great grasp of the purchase order definition, you can enjoy these benefits for your business. This is also especially important if you want to venture into the world of ecommerce.

Running an online store is no different from running a physical shop. However, due to the complexity of ecommerce development, you need a website builder to help you get through certain challenges.

Fortunately, there’s Strikingly. This website builder makes online store building much easier with its all-in-one business solution. If you’re on a tight budget, you can run Strikingly on your own without a web developer or web designer. Strikingly is easy enough for beginners to learn.

If you want to grow your business and make use of purchase orders, read the steps below:

Making Your Business Website Grow

Knowing the purchase order definition wouldn’t suffice. You have to get into the specifics of running a business too. In this section, we listed the major steps in creating a powerful ecommerce site with Strikingly.

1. Create Your Account With Strikingly


Image taken from Strikingly product

You wouldn’t enjoy the benefits of purchase orders without making your Strikingly account first. The best part is, you can create a Strikingly account for free.

With a free account, you can create as many sites as you want. This can help you apply the purchase order definition to your website's activities. The ability to make limitless numbers of sites can help you test out Strikingly features and tools. You can try out different templates that Strikingly offers. Once you’re done, you can start creating an online store with Strikingly.

2. Add a Simple Store

purchase order

Image taken from Strikingly product

Understanding purchase order definition may give you an idea of how to run an online store. But to fully immerse in the experience, you can add a Simple Store section to your website.

A simple store allows you to display the products you sell to your market. You can also customize the layout and background to make your store more appealing. Once you add a simple store to your online shop, you can begin adding products and adding their prices. You can also add categories, images, and descriptions to make it more detailed for your customers.

3. Register a New Domain

register new domain

Image taken from Strikingly product

Don’t know how to register a domain name? Strikingly got you covered. Using Strikingly’s domain settings, you can search for available domain names for your shop.

As you can see in the image above, you can register a domain name if it is available. The cost of owning a domain is relatively cheaper than most website builders too. For only $24.95 per year, you can enjoy using a unique domain name for your ecommerce website.

4. Manage Your Audience List for Newsletters

audience list

Image taken from Strikingly product

Following the purchase order definition and benefits, you can also use Strikingly’s audience list to send newsletters to your loyal customers. Once you start enjoying the advantages of purchase orders, you can also make things more efficient for your audience.

Upon sending a purchase order for your next set of products, you can send newsletters to let your customers know about what more they can expect from your shop. You can also use newsletters to send announcements whenever you’re releasing a new product to the market.

5. Use Pop-Ups to Promote Your Products


Image taken from Strikingly product

Strikingly is also great for promotions. In the purchase order definition, we talked about how small businesses can benefit from using purchase orders in minimizing financial risks. Now, we’ll discuss how we can maximize sales using the pop-ups feature from Strikingly.

Pop-ups are just one of the many promotional features in Strikingly. You can use pop-ups to announce sales whenever you have one, You can also use them to collect emails from potential and future customers. You can then use these emails for your newsletter.

Apart from pop-ups, you can also use Strikingly to optimize your website for SEO. You can use the SEO checklist or add a blog section to your site to drive traffic.

6. Use Built-In Analytics to Make Informed Decisions

purchase order analytics

Image taken from Strikingly product

Finally, one of the best features of Strikingly is its built-in analytics. From the purchase order definition, we’ll move to understand purchasing patterns from your customers.

The analytics can give you insights into how much money you’ve earned from making sales. You can also view a sales funnel that shows how many products were added to the cart and the percentage of those who visited the checkout. These details can help you solve shopping cart abandonment issues in case you experience it.

Making sound decisions is essential for your business’s financial health and success. You can use these built-in analytics from Strikingly to help you get a headstart.

Knowing the purchase order definition and its benefits can help you succeed as a small business. For a starting entrepreneur, it’s essential to understand how purchase orders can work to your advantage. Head on to Strikingly today and create your free account to experience the very best of ecommerce for budding entrepreneurs like you.