PURCHASING, SUPPLYING AND SELLING OF GOODS AND SERVICES - Purchasing and supply are the activities of acquiring goods or services to accomplish the goals of an organization. It involves the procurement, storage, and monitoring of goods sold in a store, as well as machinery, supplies, or other raw goods.
Searches related to purchasing, supplying and selling of goods and services:
supply of goods act 1979, supply of goods and services, supply of goods and services act 2015, supply of goods and services act 1982 fact sheet, sale and supply of goods act 1994, sale of goods act business to business transactions, supply of goods implied terms act 1973, sale of goods act 2015, 2016, 2017, 2018, 2019, 2020.
In many cases, purchasing and supply management may involve negotiating with manufacturers or wholesalers in the process of buying goods or materials, as well as in working closely with cost analysts and marketing professionals in deciding which products to buy and which ones are not selling well enough for the costs. This process ensures that the company keeps better selling items in stock while passing on products that sit on store shelves collecting dust.
Inventory is also a big part of managing purchasing and supplies. At set intervals, inventory is taken at every warehouse or store, and those numbers are compared with how many of each unit was originally purchased. This gives managers and owners a way of gauging which items to purchase more of and which ones to scale back on.
The people in charge of purchasing and supply management must constantly research and learn consumer behaviours, as well as stay up-to-date on new and emerging products in the market. In order for a business to survive, it must offer the things consumers want to buy.
SELLING AND BARGAINING SKILLS
Selling is the persuasion of people to buy products and services. It is the personal individual persuasive two-way communication aimed at achieving planned sales objectives.
Because selling involves direct contact with the customer, it is usually referred to as
The Process of Selling
The selling process is viewed as consisting of seven stages namely: Prospecting, Pre-approach. Approach, Presentation, Handling objections, Closing the sale, and Follow-up.
This is the search for and identification of potentials. The ability to uncover potential new customers often separates the successful from the unsuccessful sales person.
This is another preparatory step. At this stage, the salesperson is expected to gather as much information as he can about the prospects before approaching them.
This is the step when a conscious effort is expended to establish actual contact with the prospect. As first impressions are crucial in personal selling, the behaviours of the salesperson as well as his comportment are very important. If the salesperson has adequately prepared himself by comprehensive research about the prospect, he should be able to approach the prospect with confidence.
This means telling the prospect about the product or service. Before preparing a presentation, sales people need to learn all they can about the individual or company to which they hope to sell.
Usually, the prospect may raise objections about the product, the price or the payment terms. These may or may not be expressed. The aim when answering any objection, should always be to win over the prospect. Tact and utmost politeness are therefore, essential.
Closing the Sale
A close is the achievement of the preset objectives of sales people calls. In most industries it is the signing of the order.
After the close of sale, a follow-up is necessary to solve any problems which may have arisen following the purchase. The follow-up could even result in another order or chance meeting of or introduction to another prospect.
From the process of selling discussed above, it is clear that salespeople must possess the following skills.
Chances are your prospect knows plenty about you, your firm and your competition. In order to add real value, you’ll need to know even more about the prospect, the prospect’s business and the prospect’s own customers.
Every contact with a prospect or customer should end in some kind of commitment from the customer—an agreement to do something that will move the process forward. This is only possible if you plan carefully to make it happen.
The first decision that every buyer makes is: “Do I want to do business with this person?” To create that all-important instant connection, you’ve got be curious, personable and really care about the people you’re trying to help.
If you can’t satisfy a customer’s real needs, you can’t make a sale. And if you don’t ask the right questions-or if you ask them the wrong way-you’ll never know what the customers really need, and therefore will never be able to help.
This is even more important than asking the right questions. When customers are talking, it’s not enough to keep your mouth closed. You’ve also got to keep your mind open to discover ways to truly be of service.
This means creating and describing a specific solution to previously agreed-upon needs. Note: It is the exact opposite of a sales pitch, which is a one-size-fits-all way to say “all I care about is making a sale.”
Asking for Commitment
All of the above is completely pointless if the activity doesn’t eventually result in some sales. If you don’t ask for the business at some point, it’s not going to happen. So learn how to ask.
Your short-term goal is to walk “arm in arm” with the customer as they arrive at the best possible solution. Your long-term goal is to become part of that customer’s essential business network, and vice versa.
Since most business funds are borrowed, this last section shall concentrate on Loan Management and Credit Discipline.
Ensure that loans are used for the main purpose they are granted. Do not use loans meant for textile business for fish business, for example. Do not use any business loan for school fees, or other personal expenses. Do not give out loans as loans to other people. Do not use the wrong persons who are not qualified in your business. Do not use the wrong equipment in your business.
(2) Business Records
For any business to succeed it must have adequate bookkeeping records. Essential records to be kept include the following:
- Loan Record – to show the amount collected as loan and subsequent repayment.
- Sales Record – to show all the sales made on a daily basis.
- Purchase Records – to show all items purchased on a daily basis.
- Debtors Records – to show all those who bought goods on credit from you and the amounts. Do not sell on credit for a period longer than trading cycle. Do not grant credit to those with doubtful character.
- Creditors Records – to show all those who sold goods to you on credit and the repayments.
- Sunday Expenses Records – to show all other expenses relating to the business.
- Profit or Loss Records – to show the profit made or loss incurred at a particular point in time, i.e. weekly, monthly, annually, etc. This is done by subtracting all expenses, including purchases from the total sales during the period under review.
- Balance Sheet Record – to show the position of your business, including the capital, loans debtors, creditors, bank balances, and other assets and liabilities.
– This should be done bi-annually and annually and not monthly and weekly.
– Engage a professional accountant if you can afford it.
- – Every loan has repayment periods or periods.
- – Credit discipline requires that you repay your loans as and when due.
- – Do not wait until the loan officer starts calling you to repay your loan.
- – Always keep in touch with your loan officer always.
- – Do not hide from your loan officer in case of unavoidable default because you may lose sales.
- – When money is available before due date, it is advisable to make repayments to avoid using the money for other things.
(4) Multiple Loans
This is a situation where you borrow money from two or more sources for the same purpose.
– It makes repayments difficult.
– Ensure you get the right amount of loan for a particular business from one source.
– Do not over-borrow or under-borrow.
Consequences of poor credit discipline
(1) It causes embarrassment from your loan officer.
(2) It makes you to lose your reputation in the society.
(3) You will lack the ability to get more loans in the future.
(4) It can eventually lead to business failure.
Benefits of sound credit discipline
(1) You become a friend of the loan officer and the lending.
(2) You maintain your reputation in the society.
(3) You will have the advantage of getting more loans in the future.
(4) It leads to business expansion and eventual success.
Purchasing and supply are the activities of acquiring goods or services to accomplish the goals of an organization.
Selling is personal individual persuasive two-way communication aimed at achieving planned sales objectives. Because selling involves direct contact with the customer, it is usually referred to as personal selling.
The selling process is viewed as consisting of seven stages namely: Prospecting, Pre-approach, Approach, Presentation, Handling objections, Closing the sale, and Follow-up.
Sales people must possess the following skills:
1. Researching Prospects
2. Planning Meetings.
3. Creating Rapport.
4. Asking Questions.
5. Listening Actively.
6. Presenting Solutions.
7. Asking for Commitment. 8. Building Relationships.
Apart from selling the company’s products, the salesman also plays the role of: Determining customer needs, Communicating information to buyers, Providing service, Implementing trade or consumer promotions, and Supporting advertising.
Because much of business funds are borrowed, it is advisable to develop sound funds management. This can be achieved by:
1. Using your loans for the purpose you borrowed them.
2. Keeping good business records.
3. Repay loans as and when due.
4. Avoid multiple loans.
There are lots of benefits when you maintain credit discipline, and the consequences are not palatable.