People in their day to day life require multifold things to satisfy their needs and wants. For example, you want milk, bread, snacks, etc. for your breakfast; clothes, cycle, medicines, etc. how do you get all these things? These things are prepared and available in the market for sale, and you can purchase them whenever they require them.
Through sales and purchase, a business firm can control the production and meet the market rivalries. Sales improve the market value and purchase determines its progress.
Purchasing is a process by which one gets the ownership of some goods or properties transferred in his name from another, on payment of money. Likewise, selling is the procedure by which the proprietorship is transferred from one person (seller) to another person (buyer), for a certain price.
Therefore, sales and purchase always synchronize each other. Whenever you are selling, there is also a purchase that goes along with it and vice versa.
Through this blog, we shall find that purchase and sale are two indispensable alacrities that take place around us and how does mortgage formula do to obtain this to work in sequence.
Meaning of Purchase and Sale
Basically there are two parties that exist in every sale and purchase. One who sells is known as seller and the other who buys is known as buyer.
You shall get this by going through an example; Joseph owns a bakery in your street. He buys raw materials to prepare cakes and cookies from the wholesalers or warehouses on payment of money. Then he modifies the raw material into edible items for sale in his bakery. You go to him and buy one pound of cake and some cookies for your snacks and pay Joseph their price. Here you are the buyer and former becomes a seller.
Thus we find that every sale and purchase go hand in hand. The buyer offers money to the seller for his use or consumption and the seller agrees to receive money and thereby gives up his right over those goods and services.
Concept of Purchase and Sale
You are familiar with the manner of a businessman; he produces goods or services for others’ use. By this, he earns money and uses this money to invest to multiply the production. Means this money needs to be more than the amount spent on producing goods and services.
In this process, he can earn a profit. Here profit is considered as the reward for risk-taking by businessman, and it is also the return on capital invested by him. Due to this, it is necessary for the existence of the business and its growth over time.
What does a buyer need to follow before he goes to purchase?
- Identification of needs
- Analyze the attributes of the commodity
- Check it price affordability
- The social and cultural aspect
What can be done before production is undertaken to sell goods and services?
- Customer can seek satisfaction with what they buy and to meet their trust, the continuous improvement of the product or service is required
- Customers should get ensured that the product or service is easily available to them
- The prices of the product should be in reach of the customers
- It must make its customers fully aware of the benefits related to the product both before and after-sale
The activities mentioned above complied together and known as the marketing functions of a business organization, as they are the part of it.
Modes of purchase
Different modes of sale and purchase are to be adopted while purchasing goods.
- Inspecting before purchase- most common method of buying known as purchasing by inspection where the buyer inspects the goods as a whole and then plan to purchase it. It is usually used in retail buying.
- Sample/pattern purchasing- this method follows when you buy goods in bulk, and there is no possibility to check every piece. Then a sample as a specimen of goods is shown to represent the quality of the whole goods. It asserts the shade, texture, type of cloth and other information.
- Description/brand purchasing- in such cases when a seller not able to show a sample to the prospective buyer. For example, when you go to see the quality of flooring marbles, it is likely to impossible for the seller to rotate every single piece. Then, he provides a catalogue or brochure that contains the description of the goods presented for sale.
Methods of sale
- A conditional sale, where a seller delivers the goods to the buyer on the condition that he will return it with a specified refund within a pre-defined period.
- Sales which generally hold for clearing surplus or old stocks are classed as Wash Sales.
Finance in terms of credit basis
The business start-up loans are cited for those who seek to begin their worth by starting their own business. And this becomes possible when you incorporate the methods of sale and purchase which amplifies the graph of your firm and bring remarkable output in the whole criteria.
For the debtors who have bad credit in terms of holding their business move and retaining its perpetual run, bad credit business loans suit them which are offered by direct lenders.
CONCLUSION
The purchasing and selling routine involves enquiry, quotation, order, execution of the order, invoicing, opening and settling the accounts of customers, dispatch and delivery, tracking, taking delivery of final goods and services.
Exploring the business by applying comprehended methods of sales and purchase can rectify the direction towards the developed point.
DESCRIPTION
Sales and purchase always go together and devise all apprehensions a business firm invoiced. Read this blog thoroughly to get a clear knowledge of it.
