Transcript Ch. 1: An Overview of Retail Buying

Copyright © 2006 by John Wiley &
Sons, Inc. All rights reserved
Ch. 1: An Overview of Retail Buying
• The responsibilities of buyers & merchandise
managers
• Skills & personality traits for success in this
field
• How different types of stores are organized
to meet their buying needs
• The pros and cons of centralized
merchandising
• Opportunities for women in this field
Copyright © 2006 by John Wiley &
Sons, Inc. All rights reserved
Steps to Anticipate Customer Demand
• Study consumers &
their purchasing
decisions
• Use research to target
customer groups
• Determine quantity &
timing of retail buys
• Find & study the
vendors who can
provide what you need
• Handle the logistics:
packaging, shipping,
storing, pricing, entry
into store database,
etc.
• Work cooperatively on
advertising & display
• Maintain & interpret
database
• Watch the competitors
Copyright © 2006 by John Wiley &
Sons, Inc. All rights reserved
“Are you cut out to be a retail buyer?”
Traits and Skills for Success
•
•
•
•
Decision-making skills
Drive
Creativity
Critical, analytical,
conceptual skills
• Financial savvy
• Organizational skills
• Communication skills
• Managerial or
“specialist”
capabilities
• Trading acumen
Copyright © 2006 by John Wiley &
Sons, Inc. All rights reserved
Planning & Control: Functions of a
Merchandise (or Merchandising) Manager
• Makes long-range
plans for stock
levels, margins, ad
budget
• Checks sales results
against the plans
• Controls OTB budget
• Checks & countersigns large orders
• Checks and
approves any
returns to vendors
• Approves any price
changes, checks
prices with longrange plans
• Approves ideas for
sales events and
promotions
Copyright © 2006 by John Wiley &
Sons, Inc. All rights reserved
Store-Level Buying Systems
• Warehouse Requisition Plan
Store carries sufficient stock, “requisitions” more as needed
• Approved Resource List
Stores choose from list of “approved” goods & vendors
(also called Price Agreement Plan)
• Opening Stock Distribution Plan
Department manager controls “opening” stock & reorders;
retail buyer augments with new items
• Automatic Open-to-Buy
After initial buys, each department has a budget for
reorders that (theoretically) cannot be exceeded
Copyright © 2006 by John Wiley &
Sons, Inc. All rights reserved
Centralized Merchandising
PROS
CONS
• Steady flow of merchandise to
stores
• More reliable forecasting
• Better “big picture” of what’s
selling (& not selling)
• Centralized records
• Quality control
• Cost advantages
• Better stock control
• Leaves buying to the buyers,
not store or dept. managers
• Hard to adjust “big picture”
orders to local store needs
• Requires high degrees of
cooperation and
communication
• Difficult to maintain an
informed, enthusiastic sales
organization
• Requires clear-cut job
descriptions about roles &
authority
Copyright © 2006 by John Wiley &
Sons, Inc. All rights reserved