Selection of Resources

7/27/2019 Selection of Resources

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Selection of resources

Neeti Banga

Asst Professor,NIFT

Dept-LD


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The most basic role of buyer is to seek,evaluate, select, cultivate and developresources from whom suitable stock andinformation can be secured for the benefit of

the store.

BASIC RESPONSIBILITY OF THEBUYER IS OBTAINING THE RIGHT

GOODS FROM THE RIGHTMANUFACTURERS FOR THE CUSTOMER


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What are Resources ?

After determining what merchandise to buy, and

how much of it to buy to meet the needs of thetarget customer, the buyer must find sources ofsupply- these sources are called as RESOURCES

RESOURCES are also referred to as Vendors orsuppliers- and if they are making the products thatretailer sells ,they are also the manufacturers.


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Following the birth of ready to wear in 1920 ,fashionbecame the major volume producer of numerous retailorganizationsfashion merchandising became aspecialization.

Two developments that occurred in the market aresignificant in how and where resources are selected:

1. FOREIGN MARKETS2. REGIONAL MARKETS

Post world war II retailers have dramatically increasedpurchases of foreign-produced merchandise.In thepast decade,several regional markets have beenconstructed in strategically located cities .

The criteria for resource selection is directly related tothe type of organization and its segmented customergroup potential customer.


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Question to consider while selecting resources is

how many resources are necessary to achievemerchandising goals ?

Here two, resource selecting extremes are :1. TO CONCENTRATE ON AS FEW RESOURCES AS

POSSIBLE2. TO SPREAD COMMITMENTS ON THE BASIS OF

PROFIT OPPORTUNITY or BROADENED STOCK

ASSORTMENTS .

SUPPLIER OF FASHION GOODS Supplier of fashion goods can be grouped in 3

major categories-

1. Manufacturers2. Wholesalers or jobbers3. Importers


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MANUFACTURERS They are the most important supplier of fashion goods

they make or contract for goods (Even contracters come under this category )

WHOLESALERS or jobbers They buy large quantities from manufacturers and resell

them to smaller stores which visits markets infrequentlyor not at all- mostly mom and pop stores.

( Mom and Pop outlets-are generally small stores operated byhusband and wife, with limited capital, in a restrictedselling area. Very dependant on wholesaler and/ordistributor for financial support.)

Sometimes wholesalers offer to buy close out/promotionalgoods they buy at end of season on discount-mixed

colors and sizes .

IMPORTERS They buy goods that are made overseas ,merchandised

produced in forerign countries and then delivered to theircountry .


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Methods of obtaining domestic merchandise :-visiting themarket

-when and how they visit market depends on : Size of the department Speed at which the market develops new styles Lead time a market requires for delivery and Distance of the store from the marketLARGE STORE= HIGH INVENTORY LEVEL=MORE TRIPSDEVELOPMENT OF NEW STYLES= MORE TRIPS

Timing of market visits for sourcing are also dependenton price of the merchandise Highest priced goods are developed first , moderate

garments later and popular priced at the end. Store buyers are not market specialists and cannot be

in market on constant basis- so they have residentbuying houses-as their eyes and ears.

However the OPEN TO BUY function only lies in thehands of retail buyer- the buying house buyer can onlybuy with permission of the retail store buyer .


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Orders are sent by store buyers in many forms Open order limited detailing- Eg- Buy 25 coats at retail $

50.00 in best colors. Resource is discretionary buyinghouse rep exercises judgement.

Specific order- all details-manufacturer,styles,color,sizesare listed

Distribution order- This is sent by the buying houseresident buyer to selected stores where they feel that themerchandise represents market newness. If store buyerfeels it has place in the stock and he has open to buy-for it,a confirmation is sent for placement with manufacturer.

Sample order- Depends on relation between the storebuyer and resident buying house representative- If the storebuyer has confidence in the resident buyer, limiteddiscretion is given, so that if anything new is in the marketthat deserves representation, then an order f modest size

can be placed without specific approval.Eg- open order of 6 pcs of any selected style on weekly basis.


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Majority of fashion firms have representatives who arelargely commission sales agents ,who visit stores with purpose to obtain orders. They make a goodrelationship with the buyers and are able to offer

advise about styles and trends too.

Many countries have marts or regional apparelmarkets and market weeks which attract many buyersand apparel manufacturers as common meetingground.

Apparel marts become cities where buyers can selectresources in an environment that contains theaters,restaurants basic medical facilities ,living quarters.etc

Telephone, emails are methods to confirm reorders .


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METHOD OF OBTAINING FOREIGN MERCHANDISE

Easiest way to secure foreign merchandise is to buy from IMPORTER

who stocks goods

.

Advantages

limitedtransportationcosts, shorterdelivery terms,and

responsibility forthe goods.

Disadvantages : Same merchandise is

available to otherstores and additionalmarkup cannot beobtained.

So resident buyingoffices are veryimportant due toimportance of foreign

merchandise.


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ADVANTAGES OF BUYING FROM FOREIGN MARKET

Prices can be cheaper making promotionally priced goodsavailable.

Certain products are not available in the countries like US etc

so they get a wide variety of art, crafts, techniques andmachine know-how.Spanish leathers, italian knits,Indiaembroideries ..etc

Exclusivity of styling based on specification merchandisingoffers a store improved markup potential.

Certain foreign merchandise has status meaning . Opportunity to store to offer a wider variety of merchandise


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Objections to Foreign markets

Extended trips means extended absences of buyer fromstore.

Costly venture-living, travelling in another country Commitments are for long periods, reorders may not be

filled for timely selling. Specifications of foreign merchandise may not alwsys be

made as per American consumption,though has been taken

care of to large extent with close monitoring and std specs. Because of the required leadtime, the buyer must predict

fashion acceptance-a job that domestic manufacturer usuallytakes .

Now the practice is widespread so exclusivity to foreignmerchandise is not very rare.

A store depends on the buyer ability of handling the hazardslike-inaccurate assessment of fashion trends, deepcommitment, long delivery lead time .etc


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DOMESTIC MANUFACTURERS VERSUS

FOREIGN MANUFACTURERS

Advantages of working with domestic manufacturers :

Delivery faster

Proven specification of merchandise

Relationshiop with manufacturer which results in certainadvantages

Availability of merchandise in selected quantities.

Availability of faster reorders

Responsibility of merchandise received.

Ability to test selling rate

Opportunity to weigh line importance to total market

Planning and control of stock are comparitively easy

Permits stock adjustments to new trends.


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Sources of information about resourcesMany sources of information are available to learn where

resouces are located ,what they manufacture, and their

level of success.1. Resident buying house

2. Competing stores

3. Reporting services

4.

Other buyers-comparision shopping5. Market centers

6. Trade advertising-trade shows & market centers

7. Trade directories

8. Observation at events,affairs etc

9. Past experience

10. Trade publications

11. Information from resources themselves


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Unit control records reveals a complete record of everymanufacturer used bya a store and includesinformation on delivery,selling,customerrelations,markups and markdons

MOST IMPORTANT FACTORS BUYER KEEPS IN MINDWHILE SELECTION OF RESOURCES

Appropriate merchandise for customer group

Manufacturers distribution policies

Timing-fashion leader or fashion follower (dependingon stores target customer group)

Specifications

Retail price maintainance

Clearance policies

Delivery policies Advertising policies

Prices and terms

Brand identification


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1. Appropriate merchandise for customer group * qualitystandards-

quality,styling and price ranges

Some style distinctiveness must be offered which isimportant for customers ALSO PRODUCTION CAPACITY ISA CONSIDERATION.

2. Manufacturers Distribution policies :

BUYER ASKS- who do u sell in my area ?Three general distribution policies followed by a manufacturer

Franchise: applies to limited number of stores sometimes onan exclusive basis in the trading area,time or part of line

Selected- this involves a controlled number of stores within

a trading area,based on population and potential volumeavailability-selective distribution

Open- anyone with good credit rating can buy.


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3 . Timing- Design name manufacturers-sell to retailers which

have high income bracket customers and part of earlyacceptance group- their styles show fashion leadership

Medium priced vendors follow the leaders Popular or budget priced vendors follow the majority

accepted styles.Also reorder policy of vendor.4.Specifications :characteristics of fit,quality and style

represent know-how.The garments should fitwell.Popular priced buyers shd take care of checkingfits from time to time,as budget manufacturers tend tomake garments in less than ample proportions in orderto save material cost.

5.Retail price maintainance- Retail price maintainance is

directly related to the selling rate of goods- poorselling style will be marked down-when the markdowntakes place depends on the policy of the store,amountof merchandise stocked and time of the year.


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Many retailers do not use a resourse whose goods arefound in a a discount store.

But sometimes they make exception for foreignresources who supply a wide assortment of goods to

anyone with money.6 .Clearance policies: No merchant at manufacturing or retail levels can sell

all the goods handled-some will be leftover.retaileruses store promotional events to dispose stockmerchandise.manufacturer sells to stores orwholesalers as per his distribution policy,quantity andnature of goods .

7. Delivery policies- Two situations important for buyer:a/ when the original orders are delivered and in what

quantity

b/ time for reorderingManufacturer knows that the stock preparation for reorderswithout early retail success is hazardous.

Stores dislike broken shipments of colors and sizes as maylead to customer dissatisfaction.


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8. Adverstising policies The retail truth is buyer should not buy advertising

,goods should be bought on merit.

9.prices and termsIt is the buyers job to evaluate thelevel of merchandise offerings, determining whethergoods are competitively priced .Most manuf are firm inpricing except off-price and promotional items where theymay be open to negotiation.

10. Brand identification

In fashion merchandise a designer name is considered abrand name. The inclusion of a brand name becomes atactic of the store in its attempt to appral to itscustomers.But brand requirement necessitates a certain amount of

stock each season and that overstocking brands limits

money avlbl for market development of unbrandedmerchandise.Specification buying Some resources work with buyer as per

their specifications and create merchandise for them.


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CLASSIFICATION OF RESOURCES

1. KEY OR PREFERRED RESOURCES- mostprofitable moneymakers.mututal feelingof partnership.Used repeatedly-importantin terms ofSales,profitability,volume,exclusivity,service.

2. STOCK RESOURCES- they have a goodsuccess and stocked on fairly regularbasis but level is lower than key .

3.ITEM RESOURCES- used for specificstyles, events based on fashion &promotional needs eg some firm may befamous for blue jeans but offer completesportswear lines-buyer may buy oneiteam,the jean and bypass al other items.

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4.CLASSIFICATION RESOURCE-specialists in given classification- bathingsuits,pants,leather jackets.etc

5. SECONDARY RESOURCE-used onsporadic basis,when styles suitable forkeepin in stock.

6.SHOPPING RESOURCESthey are goodresources but with whom there is no reasonto do current business-they are in the listas potential and manufacturer hopes infuture they will get a chance to supply.


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Problemsthat can arise due to overconfidence inlimited resources could be-

Merchandise may not be delivered as ordered-styles,colors and quantities

The manufacturer,certain of arrangements,may look

for new worlds to conquer and flirt with competitiion.This puts the buyer and store in poor position.

Buyer may become lethargic and make little attemptto cultivate new resources.New trends may escapeattention because of lack of market exposure.

Documents

Selection of Resources