1. FM: 2.03 Understand fashion merchandise buying

2. Key Terms
Advance orders – merchandise orders with a longer lead time before the delivery date.
Approval buying – an arrangement in which merchandise is shipped to the retailer’s store for inspection before the final purchase decision is made
Back orders – merchandise orders that have not been filled within the time specified and have not been canceled by the buyer

3. Terms contd.
Blanket orders – promises to buy from favored vendors over a period of time, with no detail of colors, sizes, or shipment until later
Category captains – trusted suppliers of specific categories of goods to retailers
Commissionaires – independent buying agents who help domestic buyers with foreign purchasing

4. Terms contd.
Completion date – the date designated by the retailer on the purchase order specifying when the goods are needed and should be delivered
First cost – the wholesale price for goods in a foreign country or origin, exclusive of shipping costs and duties

5. More Terms
Invoice – a detailed list of goods shipped or services rendered, showing the money amount due; an itemized bill for materials sent
Leave paper – retail buying term for writing completed orders with vendors, usually during market week
Line buying – buying from a resource who has maintained a reputation for dependable, quality, appropriate styling, price, and a national brand name.
Line sheet - a wholesale sales sheet used by a manufacturer in the garment/fashion industry providing information on a product. It allows a garment to be listed with the sizes in its size range, great for inventory tracking

6. Line Sheet Example

7. Terms contd.
Macro-merchandising- focuses on the same image throughout the store/chain
Micro-merchandising – focuses on customizing assortments, quantities, and displays at each store
Open order – an order placed with a resident buyer or vendor with no restrictions as to style, color, price, or delivery
Procurement – buying at the wholesale level for resale at the retail level

8. Terms contd.
Market centers – concentrated areas where goods are produced, sold, and bought at wholesale prices; a geographic area where buyers and sellers meet to exchange money for products and services
Market weeks – schedules periods of time during which producers officially introduce their new lines of merchandise and retail buyers shop various lines

9. More terms
Purchase Order (PO) – a written contract authorizing the delivery of certain goods at specific prices and times
Regular orders – stock order for line merchandise
Reorder points - the level of inventory which triggers an action to replenish that particular inventory stock.

10. Terms contd.
Reorders – additional orders of the same merchandise as ordered previously
Resident Buying Officers (RBO) – a service organization located in a major market center that reports market information, acts as a market representative, and performs other related services to a group of noncompeting stores

11. Last One
Special Orders – orders for merchandise to satisfy individual customers rather than for regular stock
Terms of Sale – the conditions governing a sale, as set forth by the seller
Vendors – suppliers of goods; resources

12. Benefits of fashion retail buyers participating in major fashion events
Gaining a sense of the market
Seeing entire lines of vendors’ latest merchandise
Discovering new sources of lines from previously unused manufacturers
Meeting and consulting with manufacturing firm management
Getting special terms and purchases including lower prices
Gaining promotion or selling help from manufacturers
Networking with other buyers
Getting ideas for merchandise displays
Attending educational seminars, meetings, and other planned events

13. Domestic & Foreign Fashion Centers and Apparel Marts
New York, NY
Los Angeles, CA
Dallas, TX
Chicago, IL
Miami, FL
Atlanta, GA
NY Fashion Week 2015
Paris
Milan
Italy
Hong Kong
China
London
Hong Kong Fashion Week 2015

14. Helpful Buying Resources for Fashion Retail Buyers
Resident Buying Officers (RBOs) – see definition. They operate in the major fashion market centers. They report on what products are available from suppliers, and they select merchandise for their member retailers. Are the eyes and ears of the market for their retail clients

15. Helpful Buying Resources contd.
Merchandise brokers – work on commission, paid by producers when retail buying is arranged for that vendor’s goods. Few today due to strong presence of regional marts
Reporting/consulting services – collect, tabulate, and report information on product lines and/or merchandising activities, charging fees for their reports
Manufacturer’s traveling sales representatives – sell their lines by making calls on various retailers

16. Strategies for fashion retail buyers to be successful during market trips
Don’t buy collections in a vacuum without considering relevance to similar brands
Don’t operate without a solid strategic plan in place
Don’t over buy or order too much – communicate with your sales team
Have a plan in place

17. Determine The Appropriate Type Of Order For Buying Fashion Merchandise
Regular orders: Line merchandise
Advance orders: Have longer lead time
Reorders: Placed for immediate delivery
Back orders: Still in vendor’s files and have not been canceled
Open orders: manufacturer fills and delivers what is deemed best for the retailer; can be used to get new hot sellers
Special orders: Satisfies individual customer’s request
Blanket orders: estimates/promises to bu y over a period of time