Specialization in Buying

Unless buying of raw materials, semimanufactures, and the many items of equipment and supplies needed for the production process is effectively accomplished, manufacturers handicap themselves in their ability to compete with those who may be more skillful in the performance of this function. Ability to select from many offerings just what will sell best and to determine the most economic quantities to be bought at a given time is one of the prime tests of the efficiency of both wholesaler and retailer.

Moreover, buying is closely related to other marketing functions. Its practices and policies are often determined, in part at least, by the financial position of the purchaser, the availability of adequate and economical transportation and storage facilities, and the degree to which standardization has been accomplished. Risk is often reduced by the adoption of proper buying policies. Skillful buyers make use of reliable and pertinent market information from a variety of sources. Goods purchased for resale must be selected primarily with reference to what the market will absorb. In short, this marketing function is closely related to the functioning of almost every part of our marketing system.

Specialization in Buying

That buying is a very active and quantitatively significant function cannot be questioned when it is considered that manufacturing companies and middlemen ordinarily employ specialists to perform this activity. In manufacturing establishments a key employee, generally known as the purchasing agent, sometimes bearing the title of Vice President in Charge of Procurement, is responsible for the function. All wholesale merchants have buyers who generally occupy the position of executives, the number depending upon the size of the business and the number of different merchandise departments involved. Larger retail stores employ buyers who are also usually the managers of merchandise departments. Quite a number of large department stores have more than 100 buyers each. In the chain store field the buying function is either centralized or divided between the central office and the individual retail store unit. Among smaller independent stores, the buying function is usually the responsibility of the proprietor or one of the partners, but it is almost invariably one of the most important of their activities.