BUYING AND SELLING
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.
2. Types of Buying and Selling
Learning Objectives
By the end of this chapter, the trainee should be able to:
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Identify different types of buying and selling.
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Explain cash and credit transactions.
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Differentiate between wholesale and retail buying.
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Describe tendering and quotations used in electrical jobs.
2.1 Types of Buying
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Cash Buying – Payment is made immediately when the goods are received.
Example: Buying electrical cables at the hardware store using cash or mobile money. -
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. -
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
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Cash Selling – The seller receives payment immediately.
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Credit Selling – Goods are sold on credit; payment is received later.
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Hire Purchase Selling – The seller allows payment in instalments.
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Tendering and Quotations – Common in the electrical trade where contractors bid for jobs.
2.3 Wholesale and Retail Buying/Selling
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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
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Local Trade – Within the same country.
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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
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Define cash and credit buying.
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Differentiate between wholesale and retail trade.
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What is tendering, and how is it used in electrical work?
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Explain two advantages of cash buying.