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THE SIX MONTH OR ANNUAL PLAN
THE MODEL STOCK
THE OPEN-TO-BUYVENDOR EVALUATION
TIMING THE PURCHASE
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INVENTORY BUDGET
GMM GENERAL MERCHANDISE MANAGER
DMM
BUYER
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Resident Buying officers or Marketexperts of fashion House( Whole salemarket)
Trade Paper (Fair child Publications)
Fashion Magazines
Fashion Colors, Fabrications, Styles and
Directions to customers by media.
(Trade paper information + understandingcustomers exposure = Perfect six month Plan)
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Assortment of merchandise in inventoryto satisfy shoppers/customers
Price Points
Size distributions Styles
Color choices
Inputs Taken by buyer:
Stores Department Manager, Salesassociates
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Whats missing the inventory? (Whatmore is expected by the customer and
what is not there!!) Whats not selling as expected?
(Reasons for failure of some stocksplanned)
Competitors merchandise available atbetter price
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Different taste of customers according to
the geography
Socio Economic conditions
Demographic classifications
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Staple Merchandise
Model stock is not complicated
Fashion MerchandiseModel stock is complicated
(Silhouette, colors)
Wrong model stock:
Reduced sales, Discount sales, Loss ofcustomers
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Open to Buy: The difference betweenmerchandise needed and merchandise
available.OTB = Merchandise needed
Merchandise Available
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Amount budgeted
Merchandise on Hand(Carried from
previous season) Merchandise Commitment
( Commitment made by the merchandiser
that has not come into the store)
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Status of Inventory
Cancellation of Mark Downs
Mark Ups Purchase planning
If not planned properly
Too little, sales may be lost
Excess purchase, markdowns
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GMM orDMMs approval for buyingbeyond approved budget
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Stores depend on a Group of vendors forsupply of inventories.
No Guarantee that the line of productsproposed by them are sellable always.
Vendor evaluation is based on VendorReports.
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Markdowns
Stock Turnover
Maintained Markups
Reorders of best sellers
Promptness with reorders filled(i.e.issued to vendor) and received
Vendors policy on returns
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Distribution policy of the Vendors
Advertising allowances
Are they technologically sound(EDI) Will they accept style adjustments as per
the retailers requirement
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Place orders when delivery will beguaranteed.
Timing of purchase is based on the type ofretailers.
Classification Of Retailers
Traditional retailers ( Plan an yearahead)
Off-Price Merchants
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Major retailers: Whole line Departmental Stores, Specialized departmental stores, Specialty Chains Small stores Plan an year ahead.
Fashion Retailers: Order early; theyreceive the first production run of thevendor before it reaches the market
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Principle of working
Providing the merchandise at a low price
Wait till the vendors reduce their cost of theproduct.
Market specialist alert when the vendorsreduce their price.
Opportunistic buying when price fall andwhen it matches their operations
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Visiting the market for purchase by thebuyer depends on
Type of the retailer Off-price retailers visit every week
Traditional retailers visit when new product isintroduced.
Type of product Distance of the retail from the market
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