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Employment & Occupational Guide

Purchasers and Buyers
Source: General Services Administration

Significant Points

  • Computerization has reduced the demand for lower-level buyers.
  • About one-half were employed in wholesale or retail trade.

Nature of the Work

Purchasers and buyers seek to obtain the highest quality merchandise at the lowest possible purchase cost for their employers. (In general, purchasers buy goods and services for the use of their company or organization whereas buyers buy items for resale.) They determine which commodities or services are best, choose the suppliers of the product or service, negotiate the lowest price, and award contracts that ensure the correct amount of the product or service is received at the appropriate time. In order to accomplish these tasks successfully, purchasers and buyers study sales records and inventory levels of current stock, identify foreign and domestic suppliers, and keep abreast of changes affecting both the supply of and demand for products and materials for which they are responsible.

Purchasers and buyers evaluate suppliers based upon price, quality, service support, availability, reliability, and selection. To assist them in their search, they review listings in catalogs, industry periodicals, directories, and trade journals, research the reputation and history of the suppliers, and advertise anticipated purchase actions in order to solicit bids. Also, meetings, trade shows, conferences, and visits to suppliers' plants and distribution centers provide opportunities for purchasers and buyers to examine products, assess a supplier's production and distribution capabilities, as well as discuss other technical and business considerations that influence the purchasing decision. Once all the necessary information on suppliers is gathered, orders are placed and contracts are awarded to those suppliers who meet the purchasers' needs. Other specific job duties and responsibilities vary by employer and by the type of commodities or services to be purchased.

Purchasing professionals employed by government agencies or manufacturing firms are usually called purchasing directors, managers, or agents; buyers or industrial buyers; or contract specialists. These workers acquire product materials, intermediate goods, machines, supplies, services, and other materials used in the production of a final product. Some purchasing managers specialize in negotiating and supervising supply contracts and are called contract or supply managers. Purchasing agents and managers obtain items ranging from raw materials, fabricated parts, machinery, and office supplies to construction services and airline tickets. The flow of work—or even the entire production process—can be slowed or halted if the right materials, supplies, or equipment are not on hand when needed. In order to be effective, purchasers and buyers must have a working technical knowledge of the goods or services to be purchased.

In large industrial organizations, a distinction often is drawn between the work of a buyer or purchasing agent and that of a purchasing manager. Purchasing agents and buyers typically focus on routine purchasing tasks, often specializing in a commodity or group of related commodities—for example, steel, lumber, cotton, fabricated metal products, or petroleum products. This usually requires the purchaser to track such things as market conditions, price trends, or futures markets. Purchasing managers usually handle the more complex or critical purchases and may supervise a group of purchasing agents handling other goods and services. Whether a person is titled purchasing agent, buyer, or manager depends more on specific industry and employer practices than on specific job duties.

Changing business practices have altered the traditional roles of purchasing professionals in many industries. For example, manufacturing companies increasingly involve purchasing professionals at most stages of product development because of their ability to forecast a part's or material's cost, availability, and suitability for its intended purpose. Furthermore, potential problems with the supply of materials may be avoided by consulting the purchasing department in the early stages of product design.

Another new practice is for businesses to enter into integrated supply contracts. These contracts increase the importance of supplier selection because agreements are larger in scope and longer in duration. A major responsibility of most purchasers is to work out problems that may occur with a supplier because the success of the relationship directly affects the buying firm's performance.

Purchasing professionals often work closely with other employees in their own organization when deciding on purchases, an arrangement sometimes called team buying. For example, they may discuss the design of custom-made products with company design engineers, quality problems in purchased goods with quality assurance engineers and production supervisors, or shipment problems with managers in the receiving department before submitting an order.

Contract specialists and managers in various levels of government award contracts for an array of items, including office and building supplies, services for the public, and construction projects. They typically use sealed bids, but sometimes use negotiated agreements for complex items. Increasingly, purchasing professionals in government are placing solicitations for and accepting bids through the internet. Government purchasing agents and managers must follow strict laws and regulations in their work. These legal requirements occasionally are changed, so agents and contract specialists must stay informed about the latest regulations and their applications.

Other professionals, who buy finished goods for resale, are employed by wholesale and retail establishments where they commonly are referred to as "buyers" or "merchandise managers." Wholesale and retail buyers are an integral part of a complex system of distribution and merchandising that caters to the vast array of consumer needs and desires. Wholesale buyers purchase goods directly from manufacturers or from other wholesale firms for resale to retail firms, commercial establishments, institutions, and other organizations. In retail firms, buyers purchase goods from wholesale firms or directly from manufacturers for resale to the public. Buyers largely determine which products their establishment will sell. Therefore, it is essential that they have the ability to accurately predict what will appeal to consumers. They must constantly stay informed of the latest trends because failure to do so could jeopardize profits and the reputation of their company. Buyers also follow ads in newspapers and other media to check competitors' sales activities and watch general economic conditions to anticipate consumer buying patterns. Buyers working for large and medium-sized firms usually specialize in acquiring one or two lines of merchandise, whereas buyers working for small stores may purchase their complete inventory.

The use of private-label merchandise and the consolidation of buying departments have increased the responsibilities of retail buyers. Private-label merchandise, produced for a particular retailer, requires buyers to work closely with vendors to develop and obtain the desired product. The downsizing and consolidation of buying departments is also increasing the demands placed on buyers because, although the amount of work remains unchanged, there are fewer people needed to accomplish it. The result is an increase in the workloads and levels of responsibility.

Many merchandise managers assist in the planning and implementation of sales promotion programs. Working with merchandising executives, they determine the nature of the sale and purchase accordingly. They also work with advertising personnel to create the ad campaign. For example, they may determine the media in which the advertisement will be placed—newspapers, direct mail, television, or some combination of these. In addition, merchandising managers often visit the selling floor to ensure that the goods are properly displayed. Often, assistant buyers are responsible for placing orders and checking shipments.

Computers are having a major effect on the jobs of purchasers and buyers. In manufacturing and service industries, computers handle most of the more routine tasks—enabling purchasing professionals to concentrate mainly on the analytical aspects of the job. Computers are used to obtain up-to-date product and price listings, to track inventory levels, process routine orders, and help determine when to make purchases. Computers also maintain bidders' lists, record the history of supplier performance, and issue purchase orders.

Computerized systems have dramatically simplified many of the routine buying functions and improved the efficiency of determining which products are selling. For example, cash registers connected to computers, known as point-of-sale terminals, allow organizations to maintain centralized, up-to-date sales and inventory records. This information can then be used to produce weekly sales reports that reflect the types of products in demand. Buyers also use computers to gain instant access to the specifications for thousands of commodities, inventory records, and their customers' purchase records. Some firms are linked with manufacturers or wholesalers by electronic purchasing systems. These systems speed selection and ordering and provide information on availability and shipment, allowing buyers to better concentrate on the selection of goods and suppliers.

Working Conditions

Most purchasers and buyers work in comfortable, well-lighted offices at stores, corporate headquarters, or production or service facilities. They frequently work more than a 40-hour week because of special sales, conferences, or production deadlines. Evening and weekend work is common. For those working in retail trade, this is especially true prior to holiday seasons. Consequently, many retail firms discourage the use of vacation time from late November until early January.

Buyers and merchandise managers often work under great pressure because wholesale and retail stores are so competitive; buyers need physical stamina to keep up with the fast-paced nature of their work.

Many purchasers and buyers spend at least several days a month traveling. Purchasers for worldwide manufacturing companies and large retailers, and buyers of high fashion, may travel outside the United States.

Employment

Purchasers and buyers held about 639,000 jobs in 1996. Purchasing agents and purchasing managers each accounted for slightly more than one-third of the total, while buyers accounted for the remainder.

About one-half of all purchasers and buyers worked in wholesale and retail trade establishments such as grocery or department stores, and another one-fourth worked in manufacturing. The remainder worked mostly in service establishments or different levels of government.

Training, Other Qualifications, and Advancement

Qualified persons usually begin as trainees, purchasing clerks, expediters, junior buyers, or assistant buyers. Retail and wholesale firms prefer to hire applicants who are familiar with the merchandise they sell as well as with wholesaling and retailing practices. Some retail firms promote qualified employees to assistant buyer positions; others recruit and train college graduates as assistant buyers. Most employers use a combination of methods.

Educational requirements tend to vary with the size of the organization. Large stores and distributors, especially those in wholesale and retail trade, prefer applicants who have completed a bachelor's degree program with a business emphasis. Many manufacturing firms prefer applicants with a bachelor's or master's degree in business, economics, or technical training such as engineering or one of the applied sciences and tend to put a greater emphasis on formal training.

Regardless of academic preparation, new employees must learn the specifics of their employers' business. Training periods vary in length, with most lasting 1 to 5 years. In wholesale and retail establishments, most trainees begin by selling merchandise, supervising sales workers, checking invoices on material received, and keeping track of stock on hand, although widespread use of computers has simplified some of these tasks. As they progress, retail trainees are given more buying-related responsibilities. In manufacturing, new purchasing employees often are enrolled in company training programs and spend a considerable amount of time learning about company operations and purchasing practices. They work with experienced purchasers to learn about commodities, prices, suppliers, and markets. In addition, they may be assigned to the production planning department to learn about the material requirements system and the inventory system the company uses to keep production and replenishment functions working smoothly.

Because the procurement process is becoming more automated, it is extremely important for purchasers and buyers to be computer literate, including knowing how to use word processing and spreadsheet software. Other important qualities include the ability to analyze technical data in suppliers' proposals, good communicating, negotiating, and math skills, knowledge of supply chain management, and the ability to perform financial analyses.

Persons who wish to become wholesale or retail buyers should be good at planning and decision making and have an interest in merchandising. Anticipating consumer preferences and ensuring that goods are in stock when they are needed require resourcefulness, good judgment, and self-confidence. Buyers must be able to make decisions quickly and take risks. Marketing skills and the ability to identify products that will sell are also very important. Employers often look for leadership ability because buyers spend a large portion of their time supervising assistant buyers and dealing with manufacturers' representatives and store executives.

Experienced buyers may advance by moving to a department that manages a larger volume or by becoming a merchandise manager. Others may go to work in sales for a manufacturer or wholesaler.

An experienced purchasing agent or buyer may become an assistant purchasing manager in charge of a group of purchasing professionals before advancing to purchasing manager, supply manager, or director of materials management. At the top levels, duties may overlap into other management functions such as production, planning, and marketing.

Regardless of industry, continuing education is essential for advancement. Many purchasers participate in seminars offered by professional societies and take college courses in purchasing. Although no national standard exists, professional certification is becoming increasingly important.

In private industry, the recognized marks of experience and professional competence are the designations Accredited Purchasing Practitioner (A.P.P.) and Certified Purchasing Manager (C.P.M.), conferred by the National Association of Purchasing Management, and Certified Purchasing Professional (CPP), conferred by the American Purchasing Society. In Federal, State, and local government, the indications of professional competence are the designations Certified Professional Public Buyer (CPPB) and Certified Public Purchasing Officer (CPPO), conferred by the National Institute of Governmental Purchasing.

As more materials purchasing is conducted on a long-term basis, both private and public purchasing professionals are specializing in the contractual aspects of purchasing. The National Contract Management Association confers the designations Simplified Acquisition Specialists (SAS), Certified Associate Contract Manager (CACM), and Certified Professional Contract Manager (CPCM). These designations primarily apply to contract managers in the Federal Government and its suppliers.

Most designations are awarded only after work-related experience and education requirements are met, and written or oral exams are completed successfully.

Job Outlook

Employment of purchasers and buyers is expected to increase more slowly than the average for all occupations through the year 2006. Demand for these workers will not keep pace with the rising level of economic activity because the increasing use of computers has allowed much of the paperwork typically involved in ordering and procuring supplies to be eliminated, reducing the demand for lower-level buyers who traditionally performed these duties. Also, limited sourcing and long-term contracting have allowed companies to negotiate with fewer suppliers less frequently. Consequently, most job openings will result from the need to replace workers who transfer to other occupations or leave the labor force.

In retail trade, mergers and acquisitions have forced the consolidation of buying departments, eliminating jobs. In addition, larger retail stores are removing their buying departments from geographic markets and centralizing them at their headquarters, eliminating more jobs.

The increased use of credit cards by some employees to purchase supplies without using the services of the procurement or purchasing office, combined with the growing number of buys being made electronically, will restrict demand of purchasing agents within governments and many manufacturing firms.

Persons who have a bachelor's degree in business should have the best chance of obtaining a buyer job in wholesale or retail trade or within government. A bachelor's degree, combined with industry experience and/or knowledge of a technical field, will be an advantage for those interested in working for a manufacturing or industrial company. A master's degree in business or public administration is usually required by government agencies and larger companies for top-level purchasing positions.

Earnings

Median annual earnings of purchasers and buyers were $33,200 in 1996. The middle 50 percent earned between $23,300 and $45,900. The lowest 10 percent earned less than $18,400 while the top 10 percent earned more than $63,000. Merchandise managers and purchasing managers generally earned higher salaries than buyers or agents. As a general rule, those with the most education in their field have the highest incomes.

The average annual salaries for purchasing agents and contract specialists in the Federal Government in early 1997 were about $28,700 and $51,110, respectively.

Purchasers and buyers receive the same benefits package as their coworkers, frequently including vacations, sick leave, life and health insurance, and pension plans. In addition to standard benefits, retail buyers often earn cash bonuses based on their performance and may receive discounts on merchandise bought from the employer.

Related Occupations

Workers in other occupations who need a knowledge of marketing and the ability to assess demand are retail sales workers, sales managers, marketing and advertising managers, manufacturers' and wholesale sales representatives, insurance sales agents, services sales representatives, and procurement services, materials, and traffic managers.

Sources of Additional Information

Further information about education, training, and/or certification for purchasing careers is available from:

American Purchasing Society, 30 W. Downer Pl., Aurora, IL 60506. Homepage: http://www.american-purchasing.com

National Association of Purchasing Management, Customer Service, 2055 East Centennial Circle, P.O. Box 22160, Tempe, AZ 85285. Homepage: http://www.napm.org

National Institute of Governmental Purchasing, Inc., 11800 Sunrise Valley Dr., Suite 1050, Reston, VA 20191-5302. Homepage: http://www.nigp.org

National Contract Management Association, 1912 Woodford Rd., Vienna, VA 22182. Homepage: http://www.ncmahq.org

 

 

 

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