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.
3. The Buying Process
3.3. Importance of Proper Buying Process
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Ensures quality materials.
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Avoids wastage and loss.
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Builds good supplier relationships.
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Helps in accurate record-keeping.
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Leads to customer satisfaction.
Practical Example
An electrician wiring a building needs to buy:
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5 rolls of cable
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20 sockets
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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
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List the steps in the buying process.
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Mention four factors to consider when buying materials.
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Explain the importance of a purchase order.
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Why is it important to compare quotations?