Print this chapterPrint this chapter

BUYING AND SELLING

2. Types of Buying and Selling

Learning Objectives

By the end of this chapter, the trainee should be able to:

  1. Identify different types of buying and selling.

  2. Explain cash and credit transactions.

  3. Differentiate between wholesale and retail buying.

  4. Describe tendering and quotations used in electrical jobs.

2.1 Types of Buying

  1. Cash Buying – Payment is made immediately when the goods are received.
    Example: Buying electrical cables at the hardware store using cash or mobile money.

  2. Credit Buying – Payment is made later after the goods have been received.
    Example: An electrician buys tools on credit and pays after finishing a project.

  3. Hire Purchase – Goods are paid for in instalments; ownership passes after the final payment.
    Example: Buying an expensive generator on hire purchase.

2.2 Types of Selling

  1. Cash Selling – The seller receives payment immediately.

  2. Credit Selling – Goods are sold on credit; payment is received later.

  3. Hire Purchase Selling – The seller allows payment in instalments.

  4. Tendering and Quotations – Common in the electrical trade where contractors bid for jobs.

2.3 Wholesale and Retail Buying/Selling

  • Wholesale: Buying in large quantities for resale to retailers or technicians.
    Example: An electrical shop buys bulk switches from a wholesaler.*

  • Retail: Buying in small quantities for personal or project use.
    Example: A trainee buys one socket for a practical exercise.*

2.4 Local and International Buying and Selling

  • Local Trade – Within the same country.

  • International Trade – Buying and selling between countries.
    Example: Importing electrical appliances from China or Dubai.*

Summary

The choice of buying and selling method depends on the nature of the goods, the size of the business, and available capital.

Review Questions

  1. Define cash and credit buying.

  2. Differentiate between wholesale and retail trade.

  3. What is tendering, and how is it used in electrical work?

  4. Explain two advantages of cash buying.