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Unit 3: Buying for Discount Operations

to sell at a lower than traditional price is a reality. The enormous costs of employee benefits Notes
packages, lower insurance premiums, and do-it-yourself visual merchandising also contribute
to a reduction in expenses.
Retailers of this size are generally specialists who deal exclusively with apparel and accessories
primarily for women, with some selling men’s and children’s wear.

Did u know? With markups generally at least 20 percent lower than the conventional retail
operations, stores of this nature often attract the attention of the shopper interested in
quality merchandise, but at lower prices.
You might wonder why they are able to remain as viable businesses with the likes of the giants
in the field who also offer value shopping. The answer is simple: Some shoppers prefer the
comforts of a small store with personalized attention to the impersonal environments generally
found in the major ones.

Did u know? The largest retail chain in India is Pantaloon Retail.

Self Assessment

State whether the following statements are true or false:
10. There are a significant number of independent entrepreneurs that also sell their goods at
prices below the traditional retail.
11. The smaller merchant usually must use the only tool he or she has to operate a successful
retail venture, Price.
12. Some shoppers prefer the comforts of a small store with personalized attention to the
impersonal environments generally found in the major ones.

3.4 Buyer’s Role in Purchasing for Discounters

While the role of the buyers of the aforementioned types of operations is somewhat similar in
many ways to that of the buyers for traditional operations, there are some differences. Their
concentration centers on the acquisition of merchandise that could be offered at discount prices,
but, at the same time, bring a profit to the company they represent.
Among their priorities are establishing relationships with vendors that will bring them the best
possible prices, and convincing those vendors who are reluctant to sell to them because of the
potential problems with their traditional accounts, to do so.
3.4.1 Vendor Relationships

Every buyer for traditional operations must establish vendor relationships to ensure that they
will be treated fairly in terms of prompt delivery, return privileges, and so forth. The discount
purchasers, however, must take the lead to give them the edge when special pricing becomes
available and “deals” are going to be offered. In this way, they will be ready to capitalize on
purchases that will give them a better markup, and ultimately a greater profit for their company.
With merchants of this nature doing business on less than the typical markup gaining that
competitive pricing edge is a must.

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