Exam One Flashcards
Primary Reason for Business?
Make Profit / Money
Analytics
Help decision makers make better informed decisions
How do you increase Profit?
Either selling more or selling more efficiently - Reduce Costs
Wholesale Distribution
Everyone doesn’t pay the same price for a product
Cost
What you pay for an item
Price
What your customer pays for an item
Markup
Difference between what you pay vs how much you charge
Three types of costs
- Replacement
- Market
- WAC
Replacement cost
Cost of the item from the vendor
Market Cost
- Higher than replacement cost
- Accounts for damage, freight, and theft
- More accurately reflects “True Cost” and is what most distributors will use to determine the price of an item
Weighted Average Cost (WAC)
- True cost of inventory
- Used for tax and accounting purposes
Steps to selling an item
- Sell the requested Item
- Offer substitute
- Offer upselling items
4 Groups to consider when making decisions
- Customers
- Competition
- Distributor stock / share holders
- Vendors
Customer
Who is buying from you
Vendor / supplier
Who you are buying from
Purchaser / Buyer
Your representative who buys from vendor
Purchase Order
How you buy from vendor
Sales Order
how your customer buys from you
What are the support services
- IT
- Human resource management
- Finance Management and Accounting
Way to add $ to a sales order for items you cant touch
- Labor
- Rental
- Free promotional items
Customer Types
- Credit
- Cash
What constitutes a cash customer
Pays in cash, check, or credit card
Stock Order
- Most common
- Ships immediately or pick up now
Direct Order
- Shipped directly from the vendor
- Does not affect inventory
