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Final

RMG 400 Study Guide - Final Guide: Markdown, Gross Margin


Department
Retail Management
Course Code
RMG 400
Professor
Hong Yu
Study Guide
Final

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Chapter 2:
THE BUYER’S JOB
It is difficult to generalize about what a buying career will involve because of the diversity of the
types of retailers that exist
Trends also impact the activities buyers perform
Factors Affecting the Scope of the Buyer’s Job
Merchandise Carried
Basics merchandise:
Products that a business wants to always have in stock
Tend to have stable consumer demand, so inventory and sales vary little from year to
year
Fashion merchandise:
Relies on forecasting consumer demand and market trends, since a fashion that sold
well last year may not sell at all this year
Fashion buyers must spend time in the market to locate unique items or fashion looks that the
competition does not carry
Organizational Structure
Many large chain firms have centralized the firm’s buyers at corporate headquarters.
At some retail stores, buyers also supervise the sales floor, evaluating sales associates.
In small independent stores, the owner usually performs all the buying duties.
Size of the Retail Organization
In small retail stores, the buyer may be responsible for buying all the merchandise for several
departments
In large retail stores, buyers become more specialized; they are responsible for buying product
categories
The Buyer’s Job:
Duties and Responsibilities
Develop merchandising strategies
Know market trends and economic conditions
Analyze and interpret reports
Make regular market trips
Plan and select merchandise assortments
Negotiate with vendors for favorable terms and services
Plan and develop private brands
Price merchandise to generate desired profits
Experiment with new merchandising trends and vendors
Identify fast-selling and slow-selling products
Maintain well-balanced stocks and assortments
Consult with sales associates and store managers
Coordinate promotion activities
Shop and analyze competing stores
Achieve goals in sales, markups, markdowns, gross margin, and turnover
Role of Assistant Buyers
Prepare daily reports to identify best-sellers and slow sellers
Replenish basic stock
Complete markdown records and reports
Review inventory records
Follow up on orders to ensure prompt delivery
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