buying and selling Flashcards
what is globalization?
growing integration of the world’s economy
what are the sources of buying?
homebuying
international buying
indirect buying
direct buying
mail order
what is homebuying?
buying and selling goods with the aim of making profits among people of the same country
3 advantages of homebuying
communication is easier
costs can be low
goods can be delivered quickly
3 disadvantages of homebuying
limited choice
quality can be low
higher costs for buyers
what is international buying?
buying items from international markets
3 advantages of international buying
cheaper supplies from low cost regions
good quality products can be bought
improved choices for buyers
3 disadvantages of international buying
difficulty in communication
Technical barriers
Cultural barriers
what is indirect buying?
the purchase of goods indirectly from intermediaries
3 advantages of indirect buying
can order in convenient quantities
deliver goods
different variables available
3 disadvantages of indirect buying
cannot guarantee on quality
handling cost is applicable
limited quantities may be available
what is direct buying?
purchase of goods directly from manufacturers
3 advantages of direct buying
no handling fee
they may have high stock levels
fair prices
3 disadvantages of direct buying
need to buy in large quantities
need large storage capacity
delivery charges applicable
what is mail order?
buying of goods and services by mail delivery system
3 advantages of mail order
cheaper
quick delivery
greater variety of goods
3 disadvantages of mail order
deliveries can get delayed
Inconvenient when returning goods
customers pay at time of delivery
what is outsourcing?
the process of arranging somebody outside the business to do workings of the business
3 advantages of outsourcing
cost reduction & saving
need to focus on few things
access to better management skills
3 disadvantages of outsourcing
loss of control
less motivation for workers
need greater coordination
Cost associated with buying
Transport cost
Transaction cost
Administration cost
Environmental cost
Research cost
staff cost
cost associated with selling
staff cost
Payment process
stolen inventory
damaged inventory
distribution cost
packaging cost
advertising and promotion cost
