What are four types of Vendors?

1. Manufacturers

2. Wholesalers (Merchant Middlemen)

3. Manufacturer's Representatives/Broker (Non-merchant Middlemen)

4. Rack Jobbers

a) must be a large order

b) can get products rapidly

c) can get up to date products just before the selling season

d) helpful in establishing private brands

e) lower cost due to direct purchases

a) an ideal choice for a broad assortment

b) accept small orders

c) helpful in improving stock turnover

d) higher cost

e) longer lead time

a) represent several non-competing lines from manufacturers

b) don't take possession of the merchandise

c) time saving

a) special type vendor who serve client stores themselves

b) arrange rack or shelf space

c) cost more than purchasing from manufacturers or wholesalers

d) higher benefits obtained from the service

1. Merchandise and price offered

  a) fit and demand of your customers

  b) quality

  c) uniqueness or distinctiveness

  d) national vs. private brands

  e) fashionability

2. Vendor's distribution policies

  a) exclusive distribution

  b) selective distribution

  c) open distribution

3. Vendor's reputation & reliability

  a) terms offered

  b) services offered

a) closer relationships between large vendors and large retailer

b) flexibility of small vendors

c) vendor-owned stores

a) take it or leave it

b) limited authority

c) but you can do a little better

d) but I can't make up my mind

e) facts and data

f) what if

g) let's split the difference

h) time pressure

a. price

b. discounts

c. transportation terms

d. allowances

e. return privileges

f. private brands

g. others

1. Market condition

  a. retail value of the product

  b. product life cycle

2. The vendors w/ whom you will deal

  a. economic situation of the manfact.

  b. the products manfact.

  c. manfact. costs

  d. reliability of vendors

1*What is Robinson-Patman Act of 1936?

What is price-decline guarantee?

2* What is price-decline guarantee?

1*No price discrimination in interstate commerce. All price reductions must be offered on a "proportionally equal" basis to all buyers.

2* If market price drop over a stated period of time, this is the way to protect the store

What are the four discounts?

(calculate trade discount)

1. quantity discount

2. seasonal discount - discount offered if you make purchases in advance of a selling season.

3. Trade discount

  a. series of discounts

4. cash discounts

1* What are two keys in the transportation terms?

2* What is FOB origin?

3* What is FOB destination?

Which one is a good choice for buyers?

1* a.who needs to pay for shipping charges.

     b. when the buyer takes title to the goods

2* a. most common term

     b. title passes to the buyer when the seller deliver goods to the transportation carrier. Transportation charges as well as other expense are responsibility of the buyer.

3* a. ideal for buyers

     b. The manfact. pays the shipping charges, and the title passes to the buyer when the merchandise is delivered to the retail store.

 * FOB destination is best for buyer

1* What is the most common allowance?

2* What are some characteristics of that allowance?

1* Cooperative advertising - most common one.

2* If the buyer runs an advertisement featuring the manfact. will agree to pay a % of the ad's cost.

1* When do vendors offer some return privileges to buyer?

2* What is on "memorandum"?

3* What is on "consignment"?

1*  1.most likely to be used by vendors to promote selling of new products.

      2. Need return products w/in a specified period

^Two frequently used terms of returns.

2* the store pays for the merchandise but has the chance to return any unsold items at the end of a specified period.

3* The buyer takes merchandise into the store but pays for it only when it sells (junior dpt and trendier items)

1. cost

2. markup

3. expenses (fixed expenses vs. variable expenses)

4. profit

cost = retail price - markup

markup = retail price - cost

markup % at reatil = markup in dollars/ retail price

markup % at cost = markup in dollars/ cost

initial markup % =

    (expenses + profit + reduction - cash discounts)

                   (sales + reductions)

1. markup % based on retail

  retail price = cost/ (100% -markup% based on retail)

2. markup based on cost

  retail price = cost x (100% + markup% based on cost)

1* What is markdown? Calculate markdown, off-retail %, and markdown%.

2* Determine markdown cancellations?

1* markdown = original retail price - final retail price

    off-retail % = markdown in dollar/ original retail price

    markdown % = total dollar markdown/ total sales

2* at the end of the sale, merchandise is repriced back to the original retail price, then a markdown cancellation occurs.

markdown cancellation=

price increase x # of remaining in stock