principles of buying

8/2/2019 Principles of Buying

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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

principles of buying

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