2.02 Merchandise Buying Plans Inventory

buyers Responsible for selecting and buying goods for their companies

Buyers must: Must know customers’ taste and preferences What they want, when they want it, what they are willing to pay Determine quantities and timing for styles, colors, sizes, and prices

Department buying Buying for a specific department such as women’s, men’s, juniors, etc.

Classification buying Method of buying for chain stores. Usually only buy 1 classification. Ex: men’s sweaters, women’s dresses

Merchandise cycle Plan Buy Sell

Buying plan A PLAN that describes the types and quantities of merchandise to buy

Assortment breadth (width) The number of different categories or classifications to sell. Men’s, women’s, children’s, accessories, juniors, etc.

Assortment depth Quantity of each item carried

Inventory = stock Amount of merchandise available

Assortment plan Projects the variety and quantity of stock to meet customer demand

Dollar merchandise plan A 6-month financial plan $ amount needed Feb july; aug Jan $ amount of merchandise each month Based on the previous year

Stock turnover How quickly an item sells (moves). High turnover means the product is moving, thus, increasing profit

Shock shortage (shrinkage) Difference between the books and actual store inventory. May differ due to: Employee theft Shoplifting Errors Vendor fraud

Stock keeping unit (sku) A number assigned to each item Gender Size Color style

Stock to sales ratio $ stock value beginning of month $ projected sales for month Helps determine if the right amount of merchandise will be available to sell

Complementary products Items used to complement or accessorize. Ex: selling winter coats so the store stocks hats and gloves also

Comparison shoppers People employed by stores to check out the competitors’ prices, assortment, sales, advertising, promotions, displays, services, salespeople, etc.

Indirect selling Nonpersonal promotional selling aimed at large, general audiences

Direct selling Personal interaction with the customer when exchanging merchandise for payment

Internal information Information found internally Past sales records Customer feedback Want slips Consumer polls

External information External information used Vendors Trade info (publications, shows, industry stats) Consulting services Fashion forecasters

Resources when Selecting vendors Manufacturers Wholesales Websites Catalogs importers