Resident Buying OQice

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RESIDENT BUYING OFFICE
The mass-market's fashion facelift of the past decade has forced volume retailers to
turn to a new support system for a new kind of expertise -- the resident buying offices.
A resident buying office is one that does the buying activities for many big producers

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and/or retailers in the same line of business. The buying office provides their clients
with all the markets updates like prices, new products, new technologies etc. The
 buying office may also after approval from its clients initiate the procurement process


 by placing the order and finally delivering the clients. The buying houses earn a
commission from the clients.
any firms use the resident buying offices as they have resources that are better 
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suited for making the purchase as they have long-term relations with the sellers and
can negotiate much more with them because they have several orders from several
clients.

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fashion buying houses operate in $ndia which serve big fashion
 brands about the new fashion trends in the market, they also find the fabrics for them
and also do the final procurement process and they earn a commission. The big brands
get the ease by outsourcing their buying and gain from the expertise of the buffing
office.

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ORGANIZATION/STRUCTURE OF A RESIDENT BUYING
OFFICE
An organi%ation chart for a resident buying office is dependent upon the clientele it
serves. $n a larger office servicing giant stores, there must be many levels of 
responsibility and a wide range of buyers and staff because there must be office
coverage for all store personnel. $t is easiest to say, that every member of a store has a
counterpart in the &( and that they consult during market trips, and in the case of 
higher store levels, when annual meetings are held.

The line of organi%ation, therefore, of a typical ready-to-wear office operation is#

• )eneral erchandise anager 

• *ivisional erchandise anager 
• uyer
• Assistant uyer

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• !ollow-up Assistant

$n conclusion, the resident buying office is a necessary adunct of a store, particularly

in fashion merchandising where the roots of its establishment were first planted.

CLASSIFICATION OF RESIDENT BUYING OFFICES

THE INDEPENDENT OFFICE THE STORE OWNED OFFICE

+. alaried or fixed fee office +. rivate office

. erchandise broker or 0ommission

. Associated office
office

1. yndicated or chain owned office

The type of resident buying office a store uses, or can use, is a matter of the need,
si%e, and nature of the operation. A large store with many departments doing high
volume has different re2uirements from the specialty store doing a modest volume.

THE INDEPENDENT OFFICE

This is privately owned and operated and continuously seeks stores/ chains/
wholesaler-importers as clients. ome of these independent buying houses represent
large department store, whole others represent small apparel shops, specialty stores
and other types of stores, which, re2uire an interface between them and the $ndian
resources. This type of an office serves its clients with similar merchandise lines.
ince non-competing store are members of the some resident office, the merchandiser 
has the opportunity to work with each member store to develop private branding and

encourage volume buying. There are two type o! "#$epe#$e#t %&y"#' o!!"(e)

*+ Co,,""o# or ,er(ha#$"e %ro-er o!!"(e)   this type of independent office

receives its fee directly from the manufacturers or vendors it represents. The
commission is based on the percentage of orders placed by client stores. The
merchandise broker receives a commission from the vendor rather than from the client
store though they offer similar services to the ones offered by the salaried &( s. The

fee ranges from 1-3 percent of the !( value of exports. 

A maor disadvantage of this type of a buying office is that often there is a conflict of 
interest between the client stores and the &( s and extra effort is needed to ensure
continued business.

.+ Saar"e$ or !"0e$ !ee o!!"(e)  the salaried office is paid a fixed fee directly by the
client stores it represents. 0ontractual arrangements are made between the salaried
office and the client store. The typical fee ranges from 4 to 5 percent of the value of 
merchandise sourced through the buying house, payable in e2ual monthly
installments. The relationship of the buying office to the client store is that of a
 private professional offering service to a client.

THE STORE OWNED OFFICE

Also referred to, in trade parlance, as the dedicated buying office, it is owned by the
store or stores that it represents. $t is organi%ed to provide buying services for them.
Their offices generally represent very large department and specialty stores. This type
of an arrangement provides the last conflict of interest. There are three types of store-
owned office#

*+ The pr"1ate o!!"(e)   some large retail organi%ations maintain their own private
 buying offices in maor supplier markets. 6owever, due to the large investment
involve and the lack of an opportunity to exchange information with non-competing
stores. This type of &( doesn7t have a striking presence here. The buyers in these
offices perform the some functions as those in the independent offices8 in fact, some
stores maintain private offices on the premises of an independent office. This enables
them to have access to all the services of the large &( and yet to maintain on office
for a market representative who is directly responsible to them.

.+ Sy#$"(ate$ or (ha"# ow#e$ o!!"(e)  These are divisions of a corporation that owns
a chain of department stores. Therefore, most chain stores have central buyers in the
stores as well as resident buyers in the principal supplier markets. The syndicate
office is able to maintain a dominant position and can force adoption of its

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recommendations on stores because of common ownership. "xamples of the

syndicate (s are acys, ay 9 :0 enney. (nce the central buyers have
determined the needs of their individual stores, they re2uest the resident buyer to line
up the arrangements with the vendors/ resources. A maor advantage of such an
affiliation is the assured source of supplier market feedback. ince the central buyers
handle large volumes of merchandise, they re2uire fast, accurate, information on
fashion trends, market conditions, prices etc. a central buyer may ask the resident
 buyer to place orders, follow up on deliveries, and handle special orders, adustments,
claims and complaints.

2+ Ao("ate$ o!!"(e)  These are owned and operated by a group of stores. They are
also called co-operative offices, since their expenses are distributed among the
member stores. !ees are based upon the si%e of each store and the purchases made.
The commissionaire then follows up to make certain that the deliveries of ordered
merchandise are made in time.

0ommissionaire offices are locally owned and the staffs are all usually from the local
area. ecause of their contact with the supplier market, the market representatives in
these offices are able to direct their buyers to the best resources for their needs. They
develop and maintain resource relationship, assist office and store personnel on
overseas trips, set up meetings, and follow through on orders after the buyers have left
the foreign country. any of these offices have product development and testing
facilities that help to ensure that the garments are si%ed and constructed to the
importing market s specifications and that, where necessary, the safety and labelll;ng
regulations are met.

I3PORTANCE OF A RESIDENT BUYING OFFICE

Among their strengths is the ability to interpret current upstairs fashions for a mass
market
ome big cities serve as central markets for many types of retail goods. Accordingly, a
number of resident buying offices have been established in these cities in order to
facilitate the purchase and inventory planning decisions of retailers located in distant
communities.

&egardless of who owns them, their primary function is to provide retailers with
enough information that they can make intelligent purchase decisions.
(nce an order has been placed, the resident buying office monitors, delivers, and
 processes adustments for the retailer 
-0oordinating and assisting retail store buyers
-&esearch fashion trends
-Accompany retail buyers
-ake buying selections for other member stores
-6andle re- orders and adustments.

OFFICE FUNCTIONS AND SER4ICES

3AR5ET CO4ERAGE 

arket representatives <sometimes referred to as =buyers=> are the =eyes and ears= of 
the store buyer. They gather pertinent information, which is relayed by bulletins8
individual letters, in some cases telephone calls, and less fre2uently wires to all
member stores.

ome &( bulletin types <the titles will vary with the offices>

 Merchandise News Special Attention Reorder

 Immediate Action Fashion Activity

SEASONAL PRE4IEW CLINICS

$n a seasonal preview clinic, the buyer can review the merchandise selected by the
representative to illustrate trends of the selling season. $t can be held in the resident
 buying office if space is available, or at a nearby hotel.

*uring the meeting, recommendations are made regarding such subects as#
classification strengths, depth of purchases, stock peak dates, colors, and resources.

BUYING SER4ICES

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As previously discussed, the store buyer has the responsibility for buying
merchandise. 6owever, there are instances when the buyer cannot be in the market to
 place an order advantageously.

There are several different kinds of orders that a store buyer can instruct the resident
office representative to place.

+. Special Order  a commitment for a special customer that re2uires a personal visit to
the manufacturer to insure re2uired delivery.

.  Reorders  an additional order to replace merchandise that sold well. The &(
representative may be in a position to secure preferential or fast delivery, or place the
order with another manufacturer making similar goods <with store buyer permission>.

1. Sample Order   the placement of an order for new goods. The &( representative
must obtain permission from the store buyer before placing a commitment for newly
developed styles in minimal 2uantities to include in stock to determine a rate of sale.
The permission is based on the store buyer's respect for the representative's udgment.

3. Open Order   one that is given to the &( representative with leeway. The store
 buyer's instructions may include one, or a combination, of these specifics# price of 
merchandise, specific colors, manufacturer, si%es, and delivery. ?hat is detailed is
dependent upon the store's need and the relationship between store buyers and
representative.

WOR5ING PROCEDURE OF A BUYING HOUSE

"very organi%ation has its own working procedure. $t7s varies from organi%ation to
organi%ation. uying house work flow is given below#
*+ !irst of all marketing merchandiser contact with a buyer and collect an order 
 by showing the garments they made before or directly ask which type of 
garments buyer need.
.+ Then he /she find out the suitable factory for that specified garments. The
factory must be audited by recogni%ed organi%ation like (eko-tex, ?&A etc.
<*epends on uyer>.
2+ *o consumption 9 costing and bargaining with factory for cost for the

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specific product. !inali%e cost and send it to buyer.

6+ Then development merchandiser develops the product send +st pattern for any
correction.
7+ sually buyer makes some modification on +st pattern8 so nd pattern is
submitted according to +st pattern comments.
8+ Then fit sample is made and 9C :9&a"ty Co#troer; check is it follows the
approved nd pattern.
<+ Then the &ed seal sample is sent for approval, which is also known as buying
sample. And if the red seal sample approved then the order is confirmed.
=+ Then production merchandiser starts his work.
>+ roduction merchandiser basically follows up the total production stage. After 
getting approval of red seal sample he has to book the fabric and trims.
*?+ 6e has to !ollow up the fabric and trim arrived in factory in time or not. After 
all approval he does production-planning meeting with factory.
**+ B0 has to follow the production is running with approved item, fabric and
accessories or not. 6e helps production merchandiser by giving all production
information.
*.+ B07s main task is to check all samples <red seal, gold seal, web sample etc.>
sent to buyer, and help factory people if there is any confusion with
 production.
*2+ !abric, trims accessories are checked in lab in buying house. $tCs called in-
house test like ulk fabric hanger, shade variation in shade continuity, lab dip,
fabric 2uality etc.
*6+ *ifferent types of inspection also done in lab before ex-factory/shipment.
*7+ After doing ex-factory showing packing list and some commercial activities
 buying house receive their commission.

DAY@TO@DAY OB RESPONSIBILITIES OF A 3ERCHANDISER 

WOR5ING IN A BUYING AGENCY

+. There are huge task is done by a buying house which starts with meeting with
 buyer and ends with collecting commission from buyer.
. 0ommunicating with buyers by mail <mostly> for new 2ueries as well as

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updates
1. eeting with vendors and explaining new development re2uirement to vendor 
team
3. lanning for new season sampling and production orders
4. 0ollecting of garment samples, trims and different types of swatches from the
vendors
@. ubmission of samples to buyer through courier
5. !ollow up with vendors for samples
D. !ollow up with buyers for approvals and feedback
;. )iving approval on samples where buyer intervention is not re2uired
+E. pdating latest comments on particular styles or order to vendor 
representative
++. pdate the buyers with the order status at all stages
+. "xecution of running orders <production>
+1. Fisit to vendor site
+3. ourcing of materials for new development
+4. reparation of material re2uirement
+@. election and finali%ing of vendors for the upcoming orders based on vendor7s
experience of making similar products
+5. reparing urchase order
+D. 0osting and negotiation with trim 9 accessory suppliers
+;. 6andle 2uality issues for sampling as well as production
E. reparing inspection schedule for shipment and notifying to 2uality
department in the buying house or third party BA.
+. aintaining files and Accounts
. pdating Time and Action calendar 

REFERENCES

https#//pre%i.com/%pnmfv%enov%/resident-buying-ofiices/

https#//www.scribd.com/doc/43D4;@;E/Types-of-uying-6ouses

http#//www.mbaskool.com/business-concepts/marketing-and-strategy-terms/+@@+4-
resident-buying-office.html

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