How can I be a purchaser?
Good question. Let me share how to spend money on “purchasing”. There are two main goals of
purchasing activities, one is to have material, the other is to save money. In
a restaurant, if a customer orders a dish and you don’t have it, how embarrassing it is.
A clothing store bought a batch of clothes at the wrong price, and finally could not sell them, so it had to sell them at a discount, which was a loss-making thing. Starting
from these two goals, we will also identify some other goals. What are these goals? I will tell you later.
The latter, that is, the main goal of consumption activities, is to get as much utility as possible with as little money as possible.
So what is utility? I will introduce it to you later.
In addition to this goal, I will also propose another role of consumption, which is to take you to understand the operation of an industry at a smaller cost.
Because of the latter, that is, the consumption activities for life are closer to everyone’s life.
When considering consumption activities, we must understand a concept, that is, utility.
What is utility? The simple explanation of the so-called
utility is the degree of emotional satisfaction.
Note that utility is a highly subjective indicator because it is the degree of emotional satisfaction.
The same consumer goods may be of high utility in the eyes of some people and of low utility in the eyes of others.
The same person, under different circumstances, may have different evaluations of the utility of the same commodity, sometimes high, sometimes low.
For example, there may be a big gap between men’s and women’s evaluation of the utility of some commodities.
In fact, many businesses are selling dog meat, for example, selling luxury bags, ostensibly selling a container, but in fact selling a status symbol.
I know this myself.
So, I don’t think it’s bad for a girl to buy it.
But if you want me to buy it on my own initiative, I won’t do it.
The main reason is that I personally have no emotional needs in this respect.
But on the other hand, if you want me to buy a headset with very good sound quality, I am willing to do so, and I think it is worth it.
But when I give this earphone to some girls, they may not be able to hear anything good, so they think it’s meaningless to buy such an expensive one.
Even if we can understand each other from the level of scientific principles, we may not be able to achieve the same utility evaluation, let alone make the same consumption behavior.
In my opinion, this difference in evaluation and behavior is inevitable and necessary, otherwise our consumption activities will not be so rich and colorful. In particular,
I object to the use of economic or accounting standards to crudely judge and interfere with other people’s private consumption behavior, and to apply the concept of “IQ tax” or similar concepts to every product.
Don’t think that this kind of consumption method of talking about science and data is very wise. In fact, the behavior created by this kind of thinking is sometimes very foolish.
Speaking of this, I think of eating buffet. The
buffet model is actually quite good. For
a fee, you can go in and eat and drink, which is very friendly for people like me who can’t order.
But there are always some people who want to eat the store out when they consume the buffet.
He felt that the consumption was meaningful only if he ate the buffet back.
To this end, they will carefully calculate the market unit price of each ingredient, and then compare it with the cost of the buffet they pay to find out what to eat in order to eat back.
This is a manifestation of accounting thinking.
However, the owner of the buffet is not a fool, and has long expected such a person.
Therefore, the price of the buffet is often very high, and you are not allowed to waste, where is it easy to eat back. If you
really want to eat back, you have to eat a lot of high-sugar, high-fat foods, such as seafood, barbecue and ice cream.
This kind of food to eat too much, light is abdominal distension, vomiting, heavy gastroenteritis, the body is very uncomfortable.
Of course, since I don’t recommend you to evaluate other people’s consumption behavior by your own standards, I can’t evaluate these people’s consumption behavior by my own standards, so I can only say here.
Maybe the satisfaction behind this is something I can’t understand.
In short, starting from the concept of utility, we need to realize that the harvest of consumer behavior is actually an emotional feeling. How big
this feeling is is not directly related to how much money you spend.
In addition to utility, the emotional value of consumption can also help us understand the operation of an industry at a lower cost. I learned
this method from my work experience in auditing.
In the audit work, in order to understand the audited unit and its environment, the auditor will use various methods to achieve the goal.
These methods mainly include inquiry, observation, inspection and analytical procedures.
Asking is asking people questions, which is easy to understand.
Observation and examination are both done with the eyes. What is the difference? The objects of
observation are mainly people, objects and the environment, and so on. The
inspection is mainly for documents, such as bills and contracts. What is
an analytical procedure?
Analytical procedure means that CPAs evaluate financial information by studying the internal relationship between different financial data and between financial data and non-financial data.
Popularly speaking, it is to put all kinds of data together and compare them to see if there are any illogical places, so as to identify the authenticity of the data to a certain extent.
For example, if an amusement park gives me the income data for every day of the year, how can I know whether the data is true or false?
There is a way.
We know that when it is windy and rainy, there are fewer visitors in the amusement park, which is common sense.
Then I will take out the weather conditions in a year to see if the income is less in those windy and rainy days.
If not, then I suspect that the data may be false, unless it can give me another convincing explanation.
For example, if I want to estimate the actual occupancy situation in a residential area, I can actually find the basis from the saturation of parking spaces and the parking fee income of the property. The idea of an
analytical program is simple and flexible, as long as you can find some relationships between data, then you can verify and speculate.
As an auditor, because of the advantage of identity, I can get a lot of documents and data, and ask a lot of people, so the understanding of a business model is relatively accurate. When you
are a customer, although you can’t get so many things, you can’t do it so accurately, but it’s not impossible. The same is true of
specific practices, such as inquiry, observation, inspection and analytical procedures.
If you’re consuming a service, like training, or housekeeping.
It is often possible to communicate directly with the people who provide services, and there is still quite a lot of information that can be asked.
You know, in many service industries, service providers with outstanding abilities are not of one mind with the boss. As long as you can talk, they really dare to tell you the inside story of any industry.
If you want to understand the profits of a certain industry, it is not difficult.
If it is a listed company, there will be data in the annual report, not to mention this.
If it is not a listed company, such as a restaurant in a shopping mall, it is not difficult to figure out its profit situation.
Make a phone call to the business department of this shopping mall and ask him directly about the rent quotation of the shop location as a customer, and he will certainly tell you.
If you are good at chatting, he may give you a lot of unexpected information.
Generally speaking, in an organization, the least confidential thing is sales.
In order to get a list, sometimes they really will say anything. The sales situation of
various dishes can be seen from the sales data of dishes on takeout and group buying platforms. Take out the dishes that account for the majority and calculate the price.
Further, make clear the raw materials of these dishes, call the wholesalers of agricultural products, ask them the price, or go to the 2B e-commerce website to see the price.
In this way, grasp the big and relax the small, split one by one, and estimate one by one, you can make clear the general business situation of a store.
I’m sure you can’t help but want to try it when you hear this.
You can find a store that you are interested in and break down its cost and income item by item.
In order to estimate these amounts, you can call its main suppliers, you can collect data on the Internet, you can also observe its passenger flow on the spot, of course, don’t forget to go in and consume once, and get more accurate information in the process of consumption.
This work is very interesting and meaningful.
In addition to consumption activities, let’s look at the matters needing attention in purchasing activities.
As I said at the beginning, the main goal of purchasing activities is to have material and save money. From these two goals, we can define five more specific requirements, namely, the right price, the right quality, the right quality, and the right quantity. Right quantity, right time and right place.
When we put these five rights together, we can call them 5R theory. Each R
here is related to the two goals of having material and saving money. Let’s look at them one by one.
The first is the right price.
The right price has something to do with saving money, which is easy to understand, but why does it have something to do with material? Think about
it this way, if you buy raw materials at a higher price, will you be able to buy fewer raw materials with the same amount of money? Will there be fewer finished products that
can be made? In
this way, the number of customers that can be satisfied in unit time is less.
This is actually a very simple truth.
In order to buy raw materials at the right price, you need to find ways to improve your bargaining power with suppliers. There are several ways to
improve bargaining power.
One is to find as many suppliers as possible.
When you have more than one supplier, your bargaining power goes up.
Because the seller knows that if you think it’s too expensive, you can buy it from someone else.
The second is to increase the number of purchases.
When you purchase large quantities, it is possible for suppliers to give discounts on bulk purchases.
Even if you don’t need to buy so much at one time, you can promise verbally that you will buy again later, or sign a long-term purchase agreement directly with the supplier, so that he has a positive expectation of your purchase volume, in exchange for a discount.
The second is the right quality. The quality of
some raw materials is not up to standard, and problems will be exposed directly in the production process.
Suppose you run a restaurant and the customer orders a plate of Sliced Beef in Hot Chili Oil.
However, the beef given by the supplier has deteriorated and was discovered by the chef in the middle of cooking, so the supplier has to be contacted to provide a new one, which will lead to delays in delivery.
In other words, the chef did not find it and was directly served to the customer. After eating, the customer was not satisfied and had diarrhea.
You have to give customers a free bill, or even accept a fine from the regulatory authorities, is the goal of saving money not achieved?
The third is the right amount.
If you buy a lot, you can ask the supplier for a discount on bulk purchases, which is a way to save money.
But there is another problem to be aware of, if you purchase too much, it will bring further warehousing costs.
For those raw materials that need to be preserved by special means, such as those that need to be refrigerated, the cost of this aspect can not be underestimated.
In addition, if you buy too much, it may cause unsalable, resulting in inventory impairment losses. If the
purchase quantity is too small, it may cause material shortage, which further makes it difficult to meet the customer’s requirements in time.
In order to find the relative economic and scientific order quantity and price, we need to record and maintain the historical purchase data and sales data.
The fourth is the right time.
Many raw materials are not ordered at any time. It takes time to pack them, transport them and pick them up.
These times are sometimes uncertain for special reasons, such as peak logistics, irresistible natural disasters, and so on.
Therefore, it is better to consider the key events of the year before ordering, as well as natural factors such as weather that may affect the harvest time.
The fifth is the right place. The setting of
business location is related to the distance between us and our suppliers. The shorter the distance
from the supplier, the less likely problems will be encountered in transit, and the less the cost of transportation will be.
However, it should be noted that the setting of business location is also related to the distance between us and our customers.
If it is too far away from the customer, the transportation cost will be higher and the transportation risk will be higher when transporting the finished products. When
setting up business locations, we should take into account both customers and suppliers, so as to maximize the overall efficiency. Here
, you might as well think about why the factory of Coconut Tree Brand Coconut Juice is located in the Hainan Island, while the factory of Coca-Cola is generally located in the suburbs of big cities? What is the reason for
this difference?
Price, quality, quantity, time and place are some of the key points we need to consider when we do purchasing activities for business.
. Focus on not getting lost ~
