In this chapter, you will learn about: Factors to consider in vendor selection, ethics & social responsibility in retail, how & why to reevaluate current vendors, types of vendors to choose from, how management policies impact vendor selection.
Ch. 7: Choosing Vendors • • • • • Factors to consider in vendor selection Ethics & social responsibility in retail How & why to reevaluate current vendors Types of vendors to choose from How management policies impact vendor selection Copyright © 2006 by John Wiley & Sons, Inc All rights rese Good Vendors, Bad Vendors: “Selection Factors” for Choosing Suppliers • Suitability of merchandise • Product differentiation (how trendy?) • Timing & delivery policies • Distribution (wide, selective, exclusive?) • Pricing & payment policies • Ethical considerations • Sales assistance (help with advertising, training aids) • Recommendations of peers, buying offices • Convenience • Compatible technology • Ability to store merchandise (so you won’t have to) Copyright © 2006 by John Wiley & Sons, Inc All rights rese Types of Vendors Manufacturers • ‘Buying direct’ from manufacturers is typical of: clothing retailers those who can purchase in bulk sales of some types of perishable items privatelabel agreements • Some agreements are restrictive, with large minimum orders, price guarantees & promotional requirements toprotectthemanufacturer Amanufacturermayprefertoservicenumerous accountsinonegeographicarea Copyright â 2006 by John Wiley & Sons, Inc All rights rese Types of Vendors Brokers • Brokers are agents of and/or contract sales representatives for manufacturers • Brokers may represent several non competing product lines • They offer wholesale prices & earn commissions based on net sales • Their success is judged by how well they represent the manufacturers’ products Copyright © 2006 by John Wiley & Sons, Inc All rights rese Types of Vendors – Wholesale Distributors • Local or regional business that can service immediate needs • Greater flexibility than manufacturers (small orders, better credit terms) • Goodyearưroundselectionofunique& seasonalitemsduetomultiplesources Serveasconsultantsonproductselection, merchandising,layouts,storefixtures Tendtoinvestheavilyintechnologytospeed uporder&deliveryprocesses Copyright â 2006 by John Wiley & Sons, Inc All rights rese Retail & Vendor Support Services Rack Drop Jobbers Shippers • Stocks, prices, tidies particular areas of store or product lines (magazines, greeting cards, etc.) • Purchases goods in bulk from manufacturers or wholesalers • Manufacturers who ship directly to consumers who buy from retailer (after seeing floor samples) OR… • Companies that perform singleorder shipping functions for small (often online) retailers and/or manufacturers Copyright © 2006 by John Wiley & Sons, Inc All rights rese ... Recommendations of peers, buying offices • Convenience • Compatible technology • Ability to store merchandise (so you won’t have to) Copyright © 2006 by John Wiley & Sons, Inc All rights rese Types of Vendors Manufacturers... Types of Vendors Manufacturers • Buying direct’ from manufacturers is typical of: clothing retailers those who can purchase in bulk sales of some types of perishable items privatelabel agreements...Good Vendors, Bad Vendors: “Selection Factors” for Choosing Suppliers • Suitability of merchandise • Product differentiation (how trendy?)