04-01-2013, 11:40 AM
BUYER SELLER RELATIONSHIP AND TECHNIQUES
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INTRODUCTION
The buyer as well as the seller know very well that good relations are essential for the smooth running of the business.
The buyer and seller must recognise that they are partners in progress and as such, good relationship between them can go a long way in adding to the vitality of on-going professional relationships as well as in increasing the effectiveness.
The underlying philosophy should be based on mutual confidence and should be one of inter-dependence.
The primary objective of the relationship is to buy and sell for a profit.
The buyer should consider a good vendor as an intangible asset.
PREREQUISITES
In order to build the buyer-seller relations, the following prerequisites and rules of the game must be observed;
Completeness and clarity of communication on both sides concerning the need application and usage of the item.
Mutual confidence and interests of both the parties, by avoiding unreasonable demands, cancellations, postponements, delivery alterations and the changes in specifications.
Exhibiting genuine interest in mutual problems of procurement, supply, market situation, cost reduction , packaging, rejects, transportation and forecasting.
THE BUYERS’ ROLE
The buyer expects the seller to honour the commitments, supply the scheduled quantities in time and adhere to the agreed quality specifications.
The supplier expects buyer to be fair and honest in his dealings, and to follow ethical practices.
The person who negotiates should have the necessary authority to enter into a contract on behalf of his organization. The organization should stand by his commitments.
The broad features of the corporate purchasing policy must be made known to the vendor. This will save time and a great deal of effort.
ROLE OF SELLER
The seller should not indulge in back door selling methods, by directly approaching the buyer after bypassing the purchase department. He should understand that his negotiations will be done only with the authorized buyer and not with the actual users.
He should not try to influence the working of the quality control staff, who pass judgement of acceptance or rejection of the material.
The seller should not deal with the finance department, without approval of the authorized buyer for expending the settlement of outstanding bills.
TIPS AND TECHNIQUES TO IMPROVE BUYER SELLER RELATIONSHIP
Inform the vendor of the major purchase policies, this will save his time and effort.
Make it a point to give the vendor’s sales man a courteous reception when they visit the plant and interview them as per pre-arranged schedule.
Give adequate notice to the vendor so that they can be ready with quotations. Recognise any extra service rendered by the vendor’s salesmen through a letter of appreciation.
Be ready with “home work” so that negotiation can be businesslike and to the point.
Keep rush orders at a minimum and inform the unsuccessful bidders as to why they have not received orders.
CONCLUSION
The smooth running of the entire business is based on healthy buyer-seller relationship, and in this process , the purchase department has a crucial responsibility , to establish cordial working conditions with the supplier. In any organisation, it is the prime responsibility of the materials manager to keep relations smooth.