Page 57 - DMGT554_RETAIL_BUYING

Retail Buying

Notes
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Caution The department-store buyer must stay with the assortment specified in the model
stock that has been planned prior to purchasing.

Table 4.2 shows the comparison of a same-style purchase from two buyers. It is obvious that the
off-price buyer is willing to purchase a large quantity, perhaps the remainder of the vendor’s
inventory for that style, in colors and sizes that are in stock.

Table 4.2: Comparison of Same-Style Purchase for Department Stores and Off-Pricers

Style Color Size 3 5 7 9 11 13 15 Total Pieces Price
Department store 615 Pink 1 2 2 3 2 1 1 12 $55
Blue 1 2 2 3 2 1 1 12 $50
Off-price retailer 615 Assorted Assorted 85 $32

Because of this, the wholesale price is considerably less than that paid by the department-store
counterpart.

4.2.3 Special Handling

Buyers who purchase for their stores at full price often make special demands on the vendors.
Some retailers require that their store labels be sewn into each garment and that the merchandise
be shipped on special hangers or in individual plastic casings. The resource is generally amenable
to such demands because the merchandise is being purchased for the top price. Those who
consider price first are willing to forgo these special handling accommodations. It is equivalent
to the shopper who buys a gift at Bloomingdale’s or Neiman Marcus and expects expert gift
wrapping at no extra cost versus the customer who buys off-price and is willing to wrap the
purchase at home. The off-price retailer buys on a “no-frills” basis.

4.2.4 Label Removal

Often, manufacturers of nationally advertised brands and designer merchandise remove their
labels from merchandise priced below the original wholesale price as a condition of the sale,
although labels are becoming more commonplace at many off-price stores. By removing labels,
the vendors can somewhat protect their department-store and traditional-chain retail accounts
who have paid the full price and resell at higher prices. While the off-pricer would always prefer
to have the recognizable labels intact so that they will attract a larger segment of the buying
public motivated by famous labels, the concession is reluctantly granted to gain an even better
price advantage.
Removal of the label might eliminate the most prominent identifiable mark of a particular
manufacturer, but off-price merchants point to the other features that allow for easy identification.

Example: The lining of a garment might feature a designer logo, and the buttons might
have a similar design.
The shopper at off-price stores is often an expert in the art of discovering the name of the
manufacturer. Many shop the department stores to learn about what is in fashion and then move
on to the off-pricers to see if they can find the same items at lower prices. Syms, an off-price chain
that specializes in men’s and women’s clothing, often with the labels removed, boasts “An
Educated Consumer Is Our Best Customer.” Syms is saying that, with or without the label, their

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