The wholesale/retail business has been in a period of transition during the past two or three decades as the number of large independent operations has virtually disappeared. In their place, a limited number of giant wholesalers and retailers with some times hundreds of branch operations have emerged. General merchandise wholesalers have also been declining in numbers as retailing chains have grown so much that they are able to eliminate the wholesaler and buy directly from the manufacturer because of the enormous volume they purchase. The food wholesaler, however, still commands a sizable portion of the nation's business because large supermarket chains find buying directly from food producers and manufacturers to be impractical in many cases, especially because much of their merchandise is
perishable. Because of the current trends in wholesaling and retailing, career paths will be outlined in four major areas: department stores, food chains at the retail level, food wholesaling, and chain specialty shops.
DEPARTMENT STORES
The Nature of the Work
Currently, most department store chains have two principal operating functions: merchandising and store organization and sales. The merchandising side is responsible for selecting pro ducts, buying products, pricing, marketing strategies, and advertising. The sales side is principally involved with sales personnel, training, and store operations. Product lines are split into three broad categories: women's, which may include cosmetics, per fumes, accessories, clothing and sportswear, juniors, and intimate apparel; men's, which may include tailored clothing and accessories, sportswear, and children's clothing and accessories; and housewares, which includes tabletop, textiles (bath and bed), and small wares (such as lamps and luggage). The responsibility for buying and marketing these products is usually split among eight to twelve division merchandise managers, and each manager will have from three to ten buyers. The buyers specialize in certain types of products. For example, one buyer may handle towels and bed items; another, men's sportswear; and another, table lamps.
Retail buyers are unique among purchasing professionals. While buyers in other industries respond to the needs of other departments by buying what they have requested, retail buyers actually choose what they will buy, price it, and market it. Unlike most other purchasing professionals, retail buyers are very brand conscious because stores carry certain lines of merchandise, particularly in clothing, cosmetics, perfumes, and accessories. Since they are responsible for the selection of the products to be sold, retail buyers are very sensitive to market trends and current fads, a responsibility normally belonging to sales or product development. Most product lines that carry a brand name are quite extensive, and the buyer must know enough about his or her particular market to select those items that will sell.
Generally, retail buyers use an open-end quotation, meaning that the prices quoted will be good for the season or for a specific period of time. Branch stores may either reorder against the season contract or, if the retailer has a regional warehousing and distribution center, from the regional headquarters. Many stores have point-of-sale computer equipment, and often purchase orders against existing contracts are computer generated and do not involve the buyer.
Entry Requirements and Qualifications
Entry into a retail buying career is usually through a buyer training program. Approximately 80 to 85 percent of those entering the training program are recruited from colleges, and the remaining 15 to 20 percent are recruited from within the company. About 85 percent of the buyers come from this training, and 15 percent are lateral transfers. Braining programs are usually well structured. After a period of classroom and on-the-job training, the candidates are then placed as assistant sales personnel or assistant buyers. After one year, the candidate then switches to the other side, so that each candidate has the chance to experience both sales and merchandising.
Some travel is required, particularly in the clothing and fashion areas, and surveying the market and consumer trends is a constant part of the job. Most companies encourage continuing education through seminars and workshops centering on product knowledge and marketing.
Retailing is driven by product knowledge and marketing with relatively little emphasis on systems. Buyers must have a well-developed sense of product value because often they are buying both the low and high end of the same product and must balance the pricing between the cost and the competition. Generally; those seeking success in retail buying must be self-motivated, self-disciplined, and realistic, with much common sense, even tempered, creative, and imaginative. Their work will be the subject of considerable sales dialogue, so they must be good listeners with analytical minds.
Working Conditions
Beginning salaries are competitive, particularly through the college recruiting programs, and fringe benefits are above average. Working conditions are usually excellent, with state-of-the-art equipment. The pace is fast, but organized, and the atmosphere is professional. Advancement opportunities are very good and often involve a change in location.
RETAIL FOOD/SUPERMARKET
The term supermarket has been included as a type of retail food market, even though there is a pronounced trend toward expanding the product lines to include housewares, clothing, textiles, cameras, and music. Some stores now devote over half of their floor space to nonfood items. Other changes over the past three decades have drastically changed the nature of the retail buyer's responsibilities. The most significant changes have been: first, the almost complete transition from butchering at the store level to buying boxed or Cryovac fresh meats in which most of the breakdown of the carcasses is done at the processing plants; second, the expanded use of prepacks; and, third, the expansion of the precooked frozen lines. Most of these changes have made the life of the retail buyer much easier since the packers have assumed some of the responsibility for quality control. Some of the changes, however, have reduced retail buyer's ability to buy effectively because quality cannot be determined until the package or the box is actually opened. They now must depend more on random sampling, which, in the food business, is less effective than most other products.
The Nature of the Work
Most food/supermarket chains are organized on a regional basis. There may be one corporate headquarters, but the marketing territories are broken up into regions. Each region has a staff of buyers particularly for perishable items and also usually has a warehousing and distribution center. Often contracts for brand-name standard items and branded nonfood items are negotiated at corporate level, so there are opportunities for purchasing careers at both the regional and national headquarter levels.
In most regional purchasing departments, buying fractions are separated into two major divisions: food and general merchandise. Each of these divisions is then further separated according to product categories, such as fresh fruits and vegetables, meats, dairy, cheeses, frozen foods, canned items, and bakery and specialties. In general merchandise, they are broken down into clothing, bed and bath, and housewares. As in the department store field, buyers are responsible for product selection and pricing.
Perhaps in no other segment of the purchasing field is product knowledge as important as in the buying of foods because most foods are not manufactured, and the quality and supply is subject to the whims of nature and the processors. A food buyer cannot inspect a carload of lettuce and expect that every carload he or she receives from that particular grower is going to be equal in quality for the next six months. Most assuredly the quality will not be the same. Weather conditions change, harvesting may be too early or too late, transportation can be delayed-all factors that affect the quality and condition of the products. Consequently, continuous sampling and inspection, especially when buying the fresh perish able products, is a standard part of the purchasing department's procedure.
Most of the products in the processed foods and general merchandise lines are national brands, and, in many chains, master contracts for branded products are negotiated at corporate level. There are, however, many products that are in demand and available only on a regional level, and the regional buyers have the authority to stock those items. This fact emphasizes another unique characteristic of retail buyers. They must know both ends of the market they must know the market conditions surrounding the source of the products, and they must also be sensitive to the demands of the consumer.
Working Conditions
The working environment is usually in a typical office building, not a store, since, as noted before, most buying functions take place at the regional or corporate level. The equipment is updated, and the systems are highly computerized. Point-of-sale-based systems provide a data base that is extremely helpful and effective in tracking consumer trends.
Because the timing of deliveries is so important and there are so many uncontrollable factors involved, the work pace is sometimes very fast and stressful. An average supermarket carries twelve to sixteen thousand different items and stores with large general merchandise sections carry in excess of twenty thousand items-both tremendous volumes. Buyers must be highly organized and yet flexible enough to cope with the many minor problems that surface daily.
Since each buyer has his or her product niche, there is much autonomy in the purchasing department. Therefore, buyers must be self-disciplined and able to work effectively without close supervision. Since second guessing the markets is so much a part of their daily routine, an analytical mind and the ability to grasp complex data quickly is essential. It is interesting to note, however, that among all the professionals interviewed for this book, buyers in this category most often described their jobs as exciting.
Entry Requirements
Entry-level positions are more often found in the sales area than in department store chains. Produce buyers, meat buyers, and others often come up from the store levels where they were involved in the sale and display of the products. Most of the chains also recruit from college campuses and have formal buyer training programs very similar to department stores.
Salaries and Benefits
Salaries are average to slightly below average at the entry level, but senior buyers and above receive very nice compensation packages that include substantial fringe benefits. Retailing is a relatively high turnover industry; therefore, advancement is quite rapid. As in any chain operation, promotion usually requires relocation.
WHOLESALE FOOD
The Nature of the Work
The wholesaling of food products is a complex area simply because of the variety of products and the number of different markets served. First, the prime markets of the wholesaler are separated into two very distinct categories: institutions/restaurants/hotels and retail. Each category requires different packaging of the products, and, in some cases, the products may be processed or prepared in a completely different way for each market. The wholesalers themselves may specialize, some according to products, such as meat, fish, or produce, and others by market, such as the HRI (hotel, restaurant and institutional) supplier. The trend, however, is toward multimarket and multiproduct line operations and, as in the retail arena, toward nationwide companies with regional semiautonomous branches. This trend is opening up excellent opportunities for skilled purchasing professionals in an obviously essential industry.
It is at the wholesale level that the buyer's job takes on another dimension, that of buying for private labels. Every wholesaler carries the national brands, such as Campbell's, Kraft, and Hunt's. In addition to these national brands, many wholesalers carry a duplicate line of products under their own private label, usually priced 5 to 15 percent less than the national brands. These private label items are bought from various packers who specialize in processing for both private label and national brands. The quality of the products of the packers and processors varies considerably, and it is the job of the buyer to choose that proper balance between price and quality that will appeal to the lower end of the consumer market. The choice is made by a procedure known as blind cutting. Each potential supplier, packer, and processor, is invited to submit a sample of a product. The label is stripped from each sample and contains is coded so that the samplers will not know who packed or processed the product. The samples are graded for taste, texture, color, and fill by the buyers, who will try to find the right price-quality balance. Grading these samples requires an exceptional amount of product knowledge that sometimes takes years to accumulate.
In addition to their own private labels, some wholesalers also enter into relatively long-term contracts to supply retail chains or large independents with products under the retailer's label. It is the buyer's responsibility, to locate the best product for the price.
In practically every instance, product knowledge can only be gained through experience. Consequently, potential buyers will either be pulled from the retail ranks or be placed in an extensive buyer training program. Many are recruited from college campuses, although larger companies prefer someone who has also had at least a year in retailing.
Although buyers must be sensitive to consumer trends, the heavy emphasis is on a thorough knowledge of the product markets and the conditions that could affect supply and quality. They must always be ready to find and use alternate sources of supply, particularly for perishable items.
Entry Requirements and Qualifications
Some familiarity with computer systems is helpful for potential buyers since most modem wholesalers track inventory levels and reorder points through data processing. As noted before, many buyer trainees are obtained through college recruitment programs, although at least a year's experience in retailing is preferred. Buyer trainees are also recruited from the retail levels, particularly from the dairy, produce, and meat departments.
Those hiring potential buyers look for someone who is self-confident; amiable, but capable of being firm and demanding; and in control at all times, remaining calm under circumstances that are beyond his or her control. A professional appearance and a high level of integrity are also very important. Those who prefer a high level of activity and variety will find this field very satisfying.
Working Conditions
Working conditions are similar to those in retailing, and the salary and benefit levels are also similar. For some reason, turnover is less in wholesaling, and the consolidation trends seem to provide more than adequate advancement opportunities. At times the pace is extremely fast, and the wholesale buyer is also often subject to the whims of nature.
CHAIN OR FRANCHISE SPECIALTY STORES
The Nature of the Work
Although buying positions in specialty retailing and wholesaling are very similar to those in similar supermarket and department areas, there are some significant differences. First, specialty shops are more apt to deal exclusively with imported products, which make finding adequate sources and then negotiating favor able transportation more complicated. Second, product knowledge and an extensive knowledge of the marketplace is absolutely critical. Third, buyers in specialty areas travel more than their counterparts in other types of retailing.
Entry Requirements
Because of the extensive product and market knowledge requirements, entry into specialty buying is usually limited to those who have considerable experience in retailing or selling to retailers. Unless a prospective buyer has experience in the line of products featured by the specialty shops, he or she will still have to serve an apprenticeship before going out alone.
Salaries and Benefits
Salaries are usually higher than average, and working conditions range from good to superior. Specialty shop buyers must be self-motivated and disciplined since much of the time they work independently. They must have an acute sense of value/cost since most of the products they buy are known as high-ticket items. Specialty shops are not usually high-volume sellers and consequently depend on higher profit margins for survival. Mistakes in judging the market and the pricing levels can be costly; therefore, specialty buyers are greater risk takers than buyers in most other fields.
A CHALLENGING FIELD
At this point you have probably realized that the purchasing function in the wholesale/retail field has an added dimension to the responsibilities of being a buyer. Not only do buyers purchase the product to be sold, in many cases they also choose the products. Therefore, there is an unusual requirement to know consumer trends and markets. There is also the need to market to various levels, which means the buyer must know the low, medium, and high ends of consumer demand. Unlike most other industries, the buyer is also involved in the merchandising of the product, an area of responsibility usually reserved for sales. This field of purchasing is demanding and fast paced; however, there are few fields more challenging and varied. If you like a challenge, a variety of responsibilities, and handling many projects at the same time, take a close look at this career field. It may offer many challenges, but it also offers many rewards.
