In our last
session, we looked into Demand Forecasting as a part of Logistics. Now, let us move on to the next part of
Purchasing is a
process. Before we go into the process of purchasing, let us see how many types
of purchases are there. There are four types of purchases as major kinds and
they are a) Personal Purchasing b) Mercantile Purchasing c) Industrial
Purchasing and d) Institution or government purchasing.
When you go to
the mall and purchase a product, soap, for your own use, it is personal
purchasing. Though you may not be aware of your own importance to the
manufacturer of the brand of the soap, you are really important. Without your
purchase, the product will not be of any use to the manufacturer. The money he
has put in the production of the soap he must get back and he gets back when
you purchase the soap and many people like you buy the product, the
manufacturer makes profit. The manufacturer ultimately depends on you for his
money. If all the customers, for example, decide not to buy the soap, his
business will have to stop. Like this, for all the products you see stacked on
the shelves of the mall, there are and there must be customers; otherwise, the
mall will not store those products. So, ultimately, it is the people who make
personal purchases that decide the economy and the financial strength of the
manufacturers; it means these personal purchases influence the very financial
position of the country itself. The
national economy depends on the personal purchasing of the people. All kinds of
advertisements, visual and paper media , only aim at increasing and sustaining
the personal purchases of the people.
There are many
factors that influence the personal purchasing and we will go into them later
after looking at the other kinds of purchasing.
A person buys
some product, say clothes or dresses, only to sell them to others . He is not
making any purchase for personal use. Supposing he buys 50 shirts and keeps one
for himself and sells the rest of the lot; even then, he has not made any
personal purchase since the bulk-selling is his business. This kind of
purchasing is what we call mercantile purchasing. He is doing business by
selling shirts to others and therefore he has to buy them first. Actually, he
is a middleman between the consumer and a business man. In fact, he purchases a product for re-sale.
That is, he becomes a part of a channel of distribution of goods from the manufacturer
to the consumer.
mercantile purchasing has enormously popularized what is called e-commerce,
online purchasing and selling. What do you think of Amazon.com? Is it not the
biggest online seller? Again, some more facts are there in connection with
mercantile purchasing and we will go into them in detail in the right place.