Page 179 - DMGT554_RETAIL_BUYING

Retail Buying

Notes  Savings and immediate availability are two advantages of buying wholesale items.
 The primary advantage of buying wholesale items is the savings one can get for purchasing
in bulk.

 Wholesaling involves that part of the marketing process in which intermediaries, i.e.,
those between the producer and end consumer, buy and resell goods, making them available
to an expanded buyer’s market over an expanded geographical market area.
 Merchant wholesalers are firms engaged primarily in buying, taking title to, storing
(usually), and physically handling products in relatively large quantities and reselling the
products in smaller quantities to retailers, industrial, commercial, or institutional concerns,
and to other wholesalers.

 Manufacturers’ sales branches and offices are owned and operated by manufacturers but
are physically separated from manufacturing plants.

 The retail buyer also needs to be aware of the shipping arrangements the supplier uses.
 The smart buyer puts all the upcoming areas of negotiations and previous agreements in
letterform and sends it out before going to market.

 A trade discount, sometimes referred to as a functional discount, is a form of compensation
that the buyer may receive for performing certain wholesaling or retailing services for
the manufacturer.

 A quantity discount is a price reduction offered as an inducement to purchase large quantities
of merchandise.
 Dealing with conflict and differences is hardly ever an easy task. Barriers to creative
negotiation can be numerous and are often the saboteurs of a potential sale.
 Negotiation Tactics are a set of skills for life.
 Nibbling is among the most popular of negotiation tactics.

11.8 Keywords

Allowances: The amount of something that is permitted, esp. within a set of regulations or for a
specified purpose.
Brokers: A broker is an individual or party (brokerage firm) that arranges transactions between
a buyer and a seller, and gets a commission when the deal is executed.
Cash Discounts: Cash discounts are sometimes given to retailers to encourage them to pay early
or pay with cash.
Internet: A means of connecting a computer to any other computer anywhere in the world via
dedicated routers and servers.
Manufacturers’ Agents: Commission agent who carries noncompetitive but complementary
products from several manufacturers, for distribution along the same channels or to the same
customers.
Merchandise: Household, personal use, or commercial goods, wares, commodities, bought and
sold in wholesale and retail.

Merchant Wholesalers: These are firms engaged primarily in buying, taking title to, storing
(usually), and physically handling products in relatively large quantities and reselling the
products in smaller quantities to retailers, industrial, commercial, or institutional concerns, and
to other wholesalers.

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