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BUYING AND SELLING

Site: moureenchebet.gnomio.com
Course: moureenchebet.gnomio.com
Book: BUYING AND SELLING
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Date: Saturday, 21 March 2026, 8:28 PM

Description

A buy-and-sell enterprise is nothing more than purchasing cheaply new or previously owned products that we all need, use or want, and reselling these same items for more than cost. The difference between what you paid and what you sold it for, of course, is your profit. Buying and selling for profit is nothing new. It has been around for thousands of years; the only difference is that the currency has switched from goats and bread to paper and plastic. With that said, however, there are two primary reasons why buying and selling has recently exploded from being the closely guarded secret of a few, to the popular occupation of hundreds of thousands of people worldwide, who are now buying and selling as their sole source of income. The first reason is the advent, wide acceptance and use of the internet, and the second reason is what I refer to as the new economy.

Table of contents

1. INTRODUCTION TO BUYING AND SELLING

Learning Objectives

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

  1. Define buying and selling.

  2. Explain the importance of buying and selling in business.

  3. Identify the roles of buyers and sellers.

  4. Explain how buying and selling relate to the electrical trade.

1.1 Meaning of Buying and Selling

  • Buying is the process of obtaining goods or services in exchange for money or other means of payment.
    Example: An electrician buys cables, sockets, and switches for installation work.

  • Selling is the process of transferring goods or services to another person in exchange for money.
    Example: A technician sells electrical services to a client after wiring a house.

1.2 Importance of Buying and Selling

  1. Satisfies human needs – Consumers get what they need (e.g., lighting, wiring).

  2. Creates employment – Shop attendants, electricians, and suppliers earn income.

  3. Encourages production – Demand for electrical items encourages manufacturers to produce more.

  4. Facilitates exchange – Goods and services move from producers to consumers.

  5. Promotes business growth – Buying and selling increase profits and market expansion.

  6. Improves living standards – Provides access to quality goods and services.

1.3 Roles of Buyers and Sellers

Role Buyer Seller
1 Determines what to buy Provides the needed goods/services
2 Compares prices and quality Sets fair prices
3 Pays for goods/services Receives payment
4 Provides feedback Maintains customer relations

1.4 Relevance to the Electrical Trade

  • Electricians must buy quality materials (cables, switches, bulbs).

  • They also sell their skills and labour to customers.

  • Proper buying and selling ensure profitability, safety, and customer satisfaction.

Summary

Buying and selling are essential in all trades, including electrical work, as they connect producers, traders, and consumers.

Review Questions

  1. Define buying and selling.

  2. State four importance of buying and selling.

  3. Describe two roles of a buyer and two of a seller.

  4. Explain the importance of buying and selling in the electrical trade.

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.

3. The Buying Process

Learning Objectives

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

  1. Explain the steps in the buying process.

  2. Identify factors to consider when buying goods.

  3. Describe how to compare prices and quality.

  4. Understand how to receive and store goods.

3.1. Steps in the Buying Process

  1. Identify the Need – Determine what goods or services are required.
    Example: Need for 10 metres of electrical cable for wiring.*

  2. Find Suppliers – Look for reliable sources of materials (shops, wholesalers).

  3. Obtain Quotations – Ask for price offers from different suppliers.

  4. Evaluate Quotations – Compare quality, price, and terms of payment.

  5. Place an Order – Prepare a purchase order specifying items and quantities.

  6. Receive Goods – Check items received against the delivery note.

  7. Inspect and Record – Ensure goods are in good condition and record them in the stock register.

  8. Make Payment – Pay the supplier as agreed.

  9. Store Goods Properly – Use safe storage to prevent damage or theft.

3.2. Factors to Consider When Buying

  1. Quality – Must meet job standards and safety requirements.

  2. Price – Should be affordable and fair.

  3. Supplier reliability – Should deliver on time.

  4. After-sales service – Warranty or repair support.

  5. Availability of goods – Easily accessible.

  6. Payment terms – Cash or credit.

  7. Transportation and delivery costs.

3.3. Importance of Proper Buying Process

  • Ensures quality materials.

  • Avoids wastage and loss.

  • Builds good supplier relationships.

  • Helps in accurate record-keeping.

  • Leads to customer satisfaction.

Practical Example

An electrician wiring a building needs to buy:

  • 5 rolls of cable

  • 20 sockets

  • 10 switches
    He obtains quotations from three suppliers, compares prices and quality, places the order, and records the delivery once received.

Summary

A good buying process ensures the right materials are purchased at the right time, quality, and price.

Review Questions

  1. List the steps in the buying process.

  2. Mention four factors to consider when buying materials.

  3. Explain the importance of a purchase order.

  4. Why is it important to compare quotations?