FM: 2.03 Understand fashion merchandise buying

Merchandise Ordering Purchase Order (PO) – a written contract authorizing the delivery of certain goods at specific prices and times Regular orders – stock order for line merchandise Special orders – orders for merchandise to satisfy individual customers rather than for regular stock Reorder points - the level of inventory which triggers an action to replenish that particular inventory stock.

Types of Orders Advance orders – merchandise orders with a longer lead time before the delivery date. Back orders – merchandise orders that have not been filled within the time specified and have not been canceled by the buyer Blanket orders – promises to buy from favored vendors over a period of time, with no detail of colors, sizes, or shipment until later Reorders – additional orders of the same merchandise as ordered previously Open order – an order placed with a resident buyer or vendor with no restrictions as to style, color, price, or delivery

Determine The Appropriate Type Of Order For Buying Fashion Merchandise Regular orders: Line merchandise Advance orders: Have longer lead time Reorders: Placed for immediate delivery Back orders: Still in vendor’s files and have not been canceled Open orders: Manufacturer fills and delivers what is deemed best for the retailer; can be used to get new hot sellers Special orders: Satisfies individual customer’s request Blanket orders: Estimates/promises to buy over a period of time

Purchase Order Terms Terms of Sale – the conditions governing a sale, as set forth by the seller Completion date – the date designated by the retailer on the purchase order specifying when the goods are needed and should be delivered Vendors – suppliers of goods; resources First cost – the wholesale price for goods in a foreign country or origin, exclusive of shipping costs and duties

Purchase Order Terms Leave paper – retail buying term for writing completed orders with vendors, usually during market week Invoice – a detailed list of goods shipped or services rendered, showing the money amount due; an itemized bill for materials sent

Purchase Order Terms Line sheet - a wholesale sales sheet used by a manufacturer in the garment/fashion industry providing information on a product allows a garment to be listed with the sizes in its size range, great for inventory tracking

Key Terms Approval buying – an arrangement in which merchandise is shipped to the retailer’s store for inspection before the final purchase decision is made Line buying – buying from a resource who has maintained a reputation for dependable, quality, appropriate styling, price, and a national brand name. -Category captains – trusted suppliers of specific categories of goods to retailers Commissionaires – independent buying agents who help domestic buyers with foreign purchasing Procurement – buying at the wholesale level for resale at the retail level

Merchandising Macro-merchandising – focuses on the same image throughout the store/chain Micro-merchandising – focuses on customizing assortments, quantities, and displays at each store

Benefits of fashion retail buyers participating in major fashion events Gaining a sense of the market Seeing entire lines of vendors’ latest merchandise Discovering new sources of lines from previously unused manufacturers Meeting and consulting with manufacturing firm management Getting special terms and purchases including lower prices Gaining promotion or selling help from manufacturers Networking with other buyers Getting ideas for merchandise displays Attending educational seminars, meetings, and other planned events

Domestic Fashion Centers New York, NY Los Angeles, CA Dallas, TX Chicago, IL Miami, FL Atlanta, GA NY Fashion Week 2015 Known for: New York: largest fashion marketing center in US Dallas: western & bridal fashion Miami: world’s largest swimwear show

Foreign Fashion Centers Paris Italy (Rome, Milan) Hong Kong London Hong Kong Fashion Week 2015 Known for: Paris: considered the world fashion leader

Market Centers Concentrated areas where goods are produced, sold, and bought at wholesale prices -AmericasMart (Atlanta) - International Apparel Mart (Dallas) -CaliforniaMart (Los Angeles) https://www.youtube.com/watch?v=wMgB-EFs69c

Market Weeks Scheduled periods of time during which producers officially introduce their new lines of merchandise and retail buyers shop various lines http://fashiondistrict.org/category/la-fashion-market/

Strategies for fashion retail buyers to be successful during market trips Don’t buy collections without considering relevance to similar brands Don’t operate without a solid strategic plan in place Don’t over buy or order too much – communicate with your sales team

Helpful Buying Resources for Fashion Retail Buyers Resident Buying Officers (RBO) – a service organization located in a major market center that reports market information, acts as a market representative, and performs other related services to a group of noncompeting stores operate in the major fashion market centers report on what products are available from suppliers, and they select merchandise for their member retailers are the eyes and ears of the market for their retail clients

Helpful Buying Resources contd. Merchandise brokers – work on commission, paid by producers when retail buying is arranged for that vendor’s goods few today due to strong presence of regional marts Reporting/consulting services – collect, tabulate, and report information on product lines and/or merchandising activities, charging fees for their reports http://www.doneger.com/services.html Example: The Doneger Group Manufacturer’s traveling sales representatives – sell their lines by making calls on various retailers