merch buying............................................ppt

merch buying

1. Merchandise Buying
“Business benefits are a marathon, and not a sprint”

2. Steps in Merchandise Procurement:
- Identification of sources of supply
- Evaluation of sources of supply
- Negotiation with the sources of supply
- Establishing vendor relations
- Analysis of vendor performance

3. Identification of sources of supply
Domestic sources of supply
- Visiting central markets
- Trade shows and expositions
Global sourcing
- Country of origin effects
- Foreign trade zones
- Transportation costs
- Inventory costs
- Tariffs etc.

4. Evaluation of sources of supply
- Target market
- Image of retail organisation
- Merchandise and prices
offered
- Terms and services
- Vendor’s reputation

5. Negotiation with the sources of supply
- Trade discounts
• Single
• Chain
- Quantity discounts
• Cumulative
• Non- cumulative
Contd….

6. - Seasonal discounts
(offered as an incentive to
retailers in advance of normal
buying season)
- Cash discounts
(reduction from the invoice cost,
for payments prior to the end of
the discount period)

7. Establishing vendor relations
- Defining Strategic relationships
- Maintaining strategic relationships
- Building partnering relationships
• Awareness
• Exploration
• Expansion
• Commitment

8. Analysis of vendor performance
The elements to be listed:
- Total orders placed
- Total returns to the vendor
- The initial mark ups
- The markdowns
- Participation of vendor in different schemes
- Transportation expenses and Cash discounts offered by the
vendor
- Sales performance of the merchandise