5 Buying Terms All Retail RDs Should Know
By RDBA Contributing Editor Amanda Rubizhevsky, MPH, NC
Understanding your company’s retail business helps you be more effective in your role as a retail dietitian. Having a general understating of buying terms, including those listed here, will boost your business acumen. As you can see, there is some overlap between categories (i.e. marketing, finance, etc.) as a majority of the business side of the house works together and uses the same jargon.
Purchase Order: A buyer generated document that authorizes a purchase transaction. When the seller accepts, it becomes binding on both parties. A purchase order sets the terms, including: descriptions, quantities, prices, discounts, payment terms, shipment, etc. A purchase order is integral for record keeping in business.
Vendor Business review: This is a way to assess how a vendor is performing in comparison to what was established in the vendor’s contract. The review should also show non-contractual performance issues, such as incidents that aren't measured by a service level i.e. mislabeling a carton.
The goals of a performance review are to:
- Monitor compliance of contractually agreed upon terms
- Identify areas for improvement
- Partner with the vendor to resolve the issues
- Benchmark against similar vendors
- Assess performance and resolve performance trends prior to impacting productivity
Guaranteed sale: This is an agreement made between a buyer and a vendor. It is the vendor’s promise to take back unsold merchandise and issue either a refund or a merchandise credit toward other goods. The terms are either mandated by the company or decided by the buyer.
Shrink or Shrinkage is the loss of inventory that can be attributed to factors including employee theft, shoplifting, administrative error, vendor fraud, damage in transit or in store and cashier errors that benefit the customer. Shrinkage is the difference between recorded and actual inventory.
Product Assortment: The collection of goods that a business provides to consumers. There are four main characteristics:
- The number of products
- The number of product lines (a series of different products which form a group, all made by the same company)
- Number of product varieties within a product line
- How the products relate to each other in the retail environment.