Page 51 - DMGT554_RETAIL_BUYING

Retail Buying

Notes  The discount purchasers have to monitor and identify when special pricing will become
available and “deals” are going to be offered. That way they will be ready to capitalize on
purchases that will give them a better markup, and ultimately a greater profit for their
company.

3.6 Keywords

Independent Discount Retailers: They are entrepreneurs that also sell their goods at prices
below the traditional retail.
Markup: It involves the amount that is added to the wholesale cost of the merchandise to arrive
at the selling price or retail.
Merchandise Broker: They bring together vendors and retailers for the purposes of merchandise
procurement.
Merchandise store: it is a store where one is able to purchase anything to satisfy both personal
and household needs.

Resident Buying Offices (RBOs): They often serve the fashion apparel and accessories markets.
They are generally separate organizations that have as their members’ retailers that operate
fashion-oriented companies.

Robinson Patman Act: It disallows price discrimination no matter what the size of the order.
This act was established to protect smaller purchasers and to make the playing field a level one
in which all merchants can do business.
Specialty Operations Store: It is a retail chain that parallel to the traditionalists, but offers
discounts on all of its merchandise.
Warehouse Operations: It is somewhere between the merchandise generalists and the specialty
discounters

3.7 Review Questions

1. Which retailer enjoys the status as the number one discounter in the United States?
2. Why have traditional department stores reduced or eliminated hard goods and electronics
from their inventories?

3. Which is the number one warehouse operation that is based in India, and how is it able to
sell its products at such low prices?
4. What is the primary merchandising philosophy of all discount operations?

5. In what way have many discounters adjusted their inventories to improve their average
markups?
6. From whom do discounters purchase the majority of their merchandise?

7. Explain the major provision of the Robinson Patman Act.
8. Why do many discount operations buy from lesser-known manufacturers if the nationally
known producers provide immediate customer recognition of their products?

9. What are the two major types of market specialists that assist buyers and sellers in the
wholesale marketplace, and how do their roles differ?
10. How is the independent discount retailer able to compete with the giants in the industry?

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