4.Sources of Buying Flashcards
What are the two types of buying and selling?
Domestic and International
What are the 5 aids to trade?
communication
transport
insurance
banking
warehousing
What is commerce?
Commerce is all the activities dealing with bringing goods and services to consumers.
What are the advantages of buying from a supplier at home? 4
Low transaction costs
easy communication with low barriers
Shorter lead
More support
What are the disadvantages of buying from suppliers at home? 4
Might lose better opportunities
Limited choice
may be less efficient with economies of scale
Inability to benefit from competitive prices.
What are the advantages of buying from foreign suppliers? 4
Cheaper options
wider choice
access to high-quality products
access to developed technologies and research
What are the disadvantages of buying from foreign suppliers? 4
- Complex documentation process
differences in legal procedures - hidden costs
- longer delivery time
- communication barriers
What are the advantages of buying directly from suppliers? 4
Reduce costs through the removal of intermediaries
Better relationship with the supplier to maintain uniformity in quality
Flexible arrangments
Clear communication channels
What are the disadvantages of buying directly from suppliers? 3
Relying on few suppliers is risky
Reduced availability of choices
Not suitable for low-volume orders
What are the advantages of buying through intermediaries? 3
A wider range of choice
Reduced transport costs as one distributor may offer a range of products
arranged transport at low or no cost
What are the disadvantages of buying through intermediaries? 4
Higher price due to markup
may not be suitable for high-volume orders
lack of knowledge of products
less control over products
What are the advantages of buying through mail order? 3
Lower prices through low overhead costs
greater choice
convenient when done digitally
What are the disadvantages of buying through mail order? 4
There may not be credit purchase options
inconvenient return options
lack of personal contact
goods ordered may not stand up to the expectations when delivered
What is outsourcing?
arranging an external party to carry out work for a business
Advantages of outsourcing? 3
Lower cost
Increased capacities
Superior quality
