Selection of resources

Neeti Banga Asst Professor,NIFT Dept-LD

The most basic role of buyer is to seek, evaluate, select, cultivate and develop resources from whom suitable stock and information can be secured for the benefit of the store.

BASIC RESPONSIBILITY OF THE BUYER IS OBTAINING THE RIGHT GOODS FROM THE RIGHT MANUFACTURERS FOR THE CUSTOMER

What are Resources ?

After determining what merchandise to buy, and how much of it to buy to meet the needs of the target customer, the buyer must find sources of supply- these sources are called as RESOURCES

RESOURCES are also referred to as Vendors or suppliers- and if they are making the products that retailer sells ,they are also the manufacturers.

Following the birth of ready to wear in 1920 ,fashion became the major volume producer of numerous retail organizationsfashion merchandising became a specialization. Two developments that occurred in the market are significant in how and where resources are selected: FOREIGN MARKETS REGIONAL MARKETS Post world war II retailers have dramatically increased purchases of foreign-produced merchandise.In the past decade,several regional markets have been constructed in strategically located cities . The criteria for resource selection is directly related to the type of organization and its segmented customer group potential customer.

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Question to consider while selecting resources is how many resources are necessary to achieve merchandising goals ? Here two, resource selecting extremes are : 1. TO CONCENTRATE ON AS FEW RESOURCES AS POSSIBLE 2. 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 categoriesManufacturers Wholesalers or jobbers 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 infrequently or not at all- mostly mom and pop stores. ( Mom and Pop outlets-are generally small stores operated by husband and wife, with limited capital, in a restricted selling area. Very dependant on wholesaler and/or distributor for financial support.) Sometimes wholesalers offer to buy close out/promotional goods 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 their country .

Methods of obtaining domestic merchandise :-visiting the market -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 market LARGE STORE= HIGH INVENTORY LEVEL=MORE TRIPS DEVELOPMENT OF NEW STYLES= MORE TRIPS Timing of market visits for sourcing are also dependent on 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 resident buying houses-as their eyes and ears. However the OPEN TO BUY function only lies in the hands of retail buyer- the buying house buyer can only buy with permission of the retail store buyer .

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 buying house rep exercises judgement. Specific order- all details-manufacturer,styles,color,sizes are listed Distribution order- This is sent by the buying house resident buyer to selected stores where they feel that the merchandise represents market newness. If store buyer feels 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 store buyer and resident buying house representative- If the store buyer has confidence in the resident buyer, limited discretion is given, so that if anything new is in the market that 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.

Majority of fashion firms have representatives who are largely commission sales agents ,who visit stores with purpose to obtain orders. They make a good relationship with the buyers and are able to offer advise about styles and trends too.

Many countries have marts or regional apparel markets and market weeks which attract many buyers and apparel manufacturers as common meeting ground. Apparel marts become cities where buyers can select resources in an environment that contains theaters ,restaurants basic medical facilities ,living quarters.etc
Telephone, emails are methods to confirm reorders .

METHOD OF OBTAINING FOREIGN MERCHANDISE Easiest way to secure foreign merchandise is to buy from IMPORTER who stocks goods

Advantages limited transportation costs, shorter delivery terms, and responsibility for the goods.

Disadvantages : Same merchandise is available to other stores and additional markup cannot be obtained. So resident buying offices are very important due to importance of foreign merchandise.

ADVANTAGES OF BUYING FROM FOREIGN MARKET

Prices can be cheaper making promotionally priced goods available.

Certain products are not available in the countries like US etc so they get a wide variety of art, crafts, techniques and machine know-how.Spanish leathers, italian knits,India embroideries ..etc Exclusivity of styling based on specification merchandising offers a store improved markup potential. Certain foreign merchandise has status meaning . Opportunity to store to offer a wider variety of merchandise

Objections to Foreign markets

Extended trips means extended absences of buyer from store. 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 usually takes . Now the practice is widespread so exclusivity to foreign merchandise is not very rare. A store depends on the buyer ability of handling the hazards like-inaccurate assessment of fashion trends, deep commitment, long delivery lead time .etc

DOMESTIC MANUFACTURERS VERSUS FOREIGN MANUFACTURERS Advantages of working with domestic manufacturers :

Delivery faster Proven specification of merchandise Relationshiop with manufacturer which results in certain advantages 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.

Sources of information about resources

Many 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 shopping 5. 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

Unit control records reveals a complete record of every manufacturer used bya a store and includes information on delivery,selling,customer relations,markups and markdons MOST IMPORTANT FACTORS BUYER KEEPS IN MIND WHILE SELECTION OF RESOURCES Appropriate merchandise for customer group Manufacturers distribution policies Timing-fashion leader or fashion follower (depending on stores target customer group) Specifications Retail price maintainance Clearance policies Delivery policies Advertising policies Prices and terms Brand identification

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Appropriate merchandise for customer group * quality standardsquality,styling and price ranges Some style distinctiveness must be offered which is important for customers ALSO PRODUCTION CAPACITY IS A CONSIDERATION.

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 on an 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 volume availability-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 early acceptance 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 fit well.Popular priced buyers shd take care of checking fits from time to time,as budget manufacturers tend to make garments in less than ample proportions in order to save material cost. 5.Retail price maintainance- Retail price maintainance is directly related to the selling rate of goods- poor selling style will be marked down-when the markdown takes place depends on the policy of the store,amount of merchandise stocked and time of the year.

Many retailers do not use a resourse whose goods are found in a a discount store. But sometimes they make exception for foreign resources 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.retailer uses store promotional events to dispose stock merchandise.manufacturer sells to stores or wholesalers as per his distribution policy,quantity and nature of goods . 7. Delivery policies- Two situations important for buyer: a/ when the original orders are delivered and in what quantity b/ time for reordering Manufacturer knows that the stock preparation for reorders without early retail success is hazardous. Stores dislike broken shipments of colors and sizes as may lead to customer dissatisfaction.

8. Adverstising policies The retail truth is buyer should not buy advertising ,goods should be bought on merit. 9.prices and terms It is the buyers job to evaluate the level of merchandise offerings, determining whether goods are competitively priced .Most manuf are firm in pricing except off-price and promotional items where they may be open to negotiation. 10. Brand identification In fashion merchandise a designer name is considered a brand name. The inclusion of a brand name becomes a tactic of the store in its attempt to appral to its customers. But brand requirement necessitates a certain amount of stock each season and that overstocking brands limits money avlbl for market development of unbranded merchandise. Specification buying Some resources work with buyer as per their specifications and create merchandise for them.

CLASSIFICATION OF RESOURCES
1. KEY OR PREFERRED RESOURCES- most profitable moneymakers.mututal feeling of partnership.Used repeatedly-important in terms of Sales,profitability,volume,exclusivity,serv ice. 2. STOCK RESOURCES- they have a good success and stocked on fairly regular basis but level is lower than key . 3.ITEM RESOURCES- used for specific styles, events based on fashion & promotional needs eg some firm may be famous for blue jeans but offer complete sportswear lines-buyer may buy one iteam,the jean and bypass al other items. .

4.CLASSIFICATION RESOURCEspecialists in given classification- bathing suits,pants,leather jackets.etc

5. SECONDARY RESOURCE-used on sporadic basis,when styles suitable for keepin in stock. 6.SHOPPING RESOURCES they are good resources but with whom there is no reason to do current business-they are in the list as potential and manufacturer hopes in future they will get a chance to supply.

TROUBLE RESOURCESThey have been omitted from the shopping list as they have had quality issues-defects in merchandise,lack of timely delivery etc.

BENEFITS THAT MAY BE DERIVED FROM A CLOSE RELATIONSHIP BETWEEN A STORE AND RESOURCE ARE : By limiting the number of resources the buyer can establish good relation with existing ones. Markdown money for styles that are sold poorly. Returns of poor selling styles Manufacturers fashion shows in stores (trunk showings) Interior displays (racks,blowup ads) Specification merchandise made exclusively for store.

Problems that can arise due to overconfidence in limited resources could be

Merchandise may not be delivered as orderedstyles,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 attempt to cultivate new resources.New trends may escape attention because of lack of market exposure.