Page 113 - DMGT554_RETAIL_BUYING

Retail Buying

Notes 8.3 Merchandising Procurement

Buying items for a household is far different from buying inventory for a retail store. The
business factor makes all the difference here.

Example: If you run a convenience store or ready-to-wear boutique, you would most
probably know the importance of having a network of reliable suppliers.
A good supplier is a firm that you can contact anytime you need to replenish or replace your
merchandise. It will readily and speedily answer to your needs through its own quality delivery
and ample stocks. Above all, it has the capability of providing you lower prices, great promotions,
and sufficient credit limit.

A convenience store that sells perishables like food stuff needs to have a supplier that can meet
the special needs of the business and its clients. It must cater to the strong demand for the finest
and freshest ingredients to make the retail business thrive. On the other hand, a fashion boutique
would need to stock trendy items in time for the coming season. Thus, it requires a firm that can
provide the right apparel and accessories to fill up the store’s shelves and racks.

Did u know? More often than not, a retail store is only as good as its supplier.
If the supplier fails in its job, the retailer can find another one but it would have to suffer being
unable to provide what its client needs at the moment. The two should work hand in hand for
both to become sustainable and profitable.
The process of merchandise planning takes the buyer through to the stage of determining the
products that he needs to have in the store and the quantities that he needs of the same. A key
decision to be taken by a buyer is to determine where he has to buy the merchandise from.
Determining the source who would supply the products as required by the retailer, in the
quantities needed by the retailer, as per the requirements of the retailer, is an integral part of the
buyer’s function. Over the years, the importance of sourcing as a key element of merchandise
management has increased. This has been largely due to the shrinking of world borders and the
world becoming a global village. Global travel and the spread of mediums of mass
communication have also made the consumer more conscious of global trends and products.
For a retailer, this means that he has to be far more agile and competitive in his ability to meet
consumer demands.
Having determined the sales that need to be generated the first decisions that need to be taken
is one the type of merchandise that will be retailed. Typically, these may not be decisions that
may be taken by the buyer or merchandiser as it is the retail model that the retailer chooses to
operate which determines the merchandise mix.

!

Caution The merchandise mix may comprise:
1. National/Regional Brands
2. Own label Merchandise popularly known as the Private label.
3. A combination of both.

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