buyer-vendor relation ship
TRANSCRIPT
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Buyer-Vendor Relation Ship
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Negotiation Process The negotiation process involves the mutual
discussion and agreement between the retail buyer and merchandise resources so as to the terms of various business transaction.
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Negotiation Process A variety of activities involved in this process :Buying AuthoritySecurity Discounts and AllowanceArranging Transportation and DistributionsEstablishing the terms of saleSeeking Price Guarantee
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Buying AuthorityWhen buyer is employed by the retail store ,
he or she is given the authority to act on behalf of that store as a duly authorized agent and will represent the firm in dealing with merchandise resources.
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Securing Discounts and AllowanceA discount or allowance may be defined as
any reduction in the lost or quoted price given to the retailer by merchandise resource. There are four kinds of discounts and allowances available to the retail buyer :-
1. Quantity Discount2. Seasonal Discount3. Cash Discount
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Arranging Transportation and DistributionArranging transportation and distribution is a
third important negotiating activity. CostCarriageInsuranceLoading and unloadingCustom clearanceDuty.
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Establishing the terms of saleThe terms of sale are often offered to the
retail buyer in the form of vendor service. Basically it involved when the payment will
be madeEOM ( End of the month)ROG ( Receipt of goods)COD ( Cash on delivery)Cash Discount ( On prompt Payment )Consignment ( Unsold goods are returned
back)
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Seeking Price GuaranteePrice guarantee is fairly common for seasonal
merchandise , vendor is eager to encourage the buyer to place early orders or the vendors may use the price guarantee along with the quantity discount to encourage buyers to place large orders.
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Causes of friction between vendor and BuyersReturn and AdjustmentsCancellationShipping ProblemsSpecial orders and Minimum ordersSelling competitors and ExclusivesFashion PiracyAdvancing seasonsFailure to follow instruction.
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Return and adjustmentUnsold garments.Incorrect Forecasting.Quality concern
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Cancellation A cancellation policy should be agreed on
between vendors and buyer : Following is the list of conditions under which the order can be cancelled
1. Final ship cancel date is passed.2. Major Quality concerns3. When the vendor or manufacturer receives
a cancellation notice from the buyer.4. Buyer and vendor mutually agreed upon the
cancellation
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Shipping ProblemsEarly shipment.Late shipment.Split shipment.
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Late Shipment
15 oct ETA 22nd
NoV
10 nov ETA 20 NOV
By Sea Mode at 6 FOB $
By AIR mode CFR or CNF
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Late ShipmentIn the previous case buyer cant change the
Incoterms to CIFAt the same vendor can ask the sea freight to
be credited into his account.
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Split Shipments
60% Shipment on time
40% delayed by 1 month
due to fabric rejection
Buyer own decision to take the complete
shipment together with discount or change in
Incoterms or to take the split shipment
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Special Orders and Minimum ordersEarly DeliverySmall QuantityExtra Charges
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Selling Competitors and ExclusivesVendor selling same line to competitors
buyersExclusive agreements may be arranged
between vendors and buyers. The purpose of exclusive agreement is primarily to protect the buyers from having the same goods offered for sale to his her competition.
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Fashion PiracyBuyers and vendors must establish policies
prohibiting fashion piracy at both ends.
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SubstitutionsAny kind of substitution used by vendors in
terms of the fabric/ artwork or trim
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Substitutions
Label from nominated Supplier
Label from Local Supplier ( Same
quality )
0.175$
0.05$
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SubsitutionAny kind of substitution need to be approved
from buyer before using the same in bulk shipment.
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Failure to Follow InstructionsFailure to follow instruction will add to the
cost and buyer will charge back to the vendor the added cost caused by failure to follow the instruction provided.
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Failure to Follow Instructions
Attaching Spare button at Inside placket In
India
Attaching Spare button at Inside
placket In America0.1 $/shirt
0.01 $/shirt
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Establishing Good Vendor- Buyer Relations The vendor and buyer must remember that
each other is responsible for actively promoting and protecting a company’s image. Problems and complaints that reflect on the image of the vendor’s or buyer’s company will eventually prove costly and lead to a serious loss of business. It is important to both parties that mutual confidence and respect become more evident than distrust or disrespect.
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Establishing Good Vendor- Buyer RelationsBe as loyal to a good vendor as the vendor is
expected to be to the buyerNever discontinues business without
sufficient cause and only when mutual discussion and criticism have failed to produce the desired result.
Be fair and honest when considering one another’s offering.
Make all commitments definite and precise
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Establishing Good Vendor- Buyer RelationsDo not partake in commercial bribery , that is
accept or offer gifts, rewards and commissions.
Continuously improve trade relations through education, self regulation and government regulation.
Represent the best interest of the company at all times
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Establishing Good Vendor- Buyer RelationsDo not take unfair advantage of one another.Become thoroughly knowledgeable of the
merchandise line you represent.Work hard to establish and maintain a good
working relationship.
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Reference Apparel Merchandising by Rosenau and
Wilson 2nd EditionMerchandising Buying by M. S. Bohlinger 5th
Edition
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Thank youSaurabh Chaturvedi