The anatomy of buying

By Wally Lynch P.A.I.D. Associates

RUYING is a six letter, two syllable word, but its Esialphsity ends there. Most dictionaries provide at least six definitions of the verb "buy." For our purposes, think of it as assembling product for effecting resale. The classic general retailer divides buying and selling into two separate functions: purchasing and marketing. This focuses on the need to assemble product only if you have a plan to sell it.

After World War II, Sears Roebuck rode sophisticated buying processes and pent up demand to record sales growth year after year into the mid-1960s. The testing, design, auditing and buying departments created a dominance of private label product lines at a known cost. They took the purchasing process into their vendors'boardrooms, purchasing production material, labor and overhead.

S\ory at a Glane

How to turn buying into sales ... recommendations that will bolster the bottom line and keep inventory fresh and alive ... handling GMROI, seasonal buys, pricing and advertising.

This worked until the cost of managing the effort hit a point of diminishing return and became prohibitive in a changing environment. The Kresge Co. (Kmart) and Sam Walton (Wal-Mart) were going in the opposite direction. Brand nanes, well bought from suppliers'showrooms, with emphasis on a plan to sell was their modus operandi. They left product development, production, quality and availability in the hands of suppliers while they concentrated on the pass through or selling plan.

Sears reduced cost of goods sold to optimize gross margins. Wal-Mart and Kmart reduced selling prices, but maintained profits by reducing operating expenses. Reported results showed Sears'expenses as much as l07o of sales higher than their competitors. This triggered changes at Sears to reduce costs of doing business.

The "marts" too have changed. They now have private labels and may be close to "known cost" :urangements with some suppliers. In our industry, Home Depot" Payless, et al., are front runners of the "pass through economically" plan to sell.

The moral of the story is don't be a big buyer, but a big seller. The rest will follow. There is no wav to be an

Kennetb Bredley, a88t. mgr., Ridout Lumbcr Co., Russellville, Ar., will transfer !o the now Fayotteville, Ar., store 85 mg,r.

John Prul Hrmmergchmldt, former MidAmcrica Lumbcrmens Association pres., is retiring from Congress afteq26 years at the end of his current term.

Rey Llnvllle, owner, LinviUe Builders & Supply, Nashville, tu., has been placed on tbe Organ Recipient Waiting List at Arkansas Baptist Hospital, Little Rock, Ar., for a possible kidney transplant.

Tommy Worren, owner/mgr., W.R. Building Center, England, Ar., has been named lst pres. of tbe newly formed England Indushial Development Corp.

Steve Bryant is celebrating one year as mgr. of Vernon l,ewis Lumber Co., Collinsville, Ok.

Anne W. Pate has been named v.p. and treas. at Roper Bros. Lumber Co., Petersburg, Va.

Murrey Prrcurl, 72, Booker & Co., Inc., has retired aftcr 50 yoars in the industry, the last 3l with Booker & Co. Deve Prett and Dele Dehlln aEsume his responsibilities.

Bob O'Qulnn bas been promoted to corporate communications mgr. for Cottcr & Co., succeeding Jobn Sulllvln, who is retiring. Gary D. Drrke is now director of inventory msnagement & systems.

Relph E. Jeckcon has been promoted to exec. v.p.-operations at Cooper Industries, Houston, Tx., according to pres./ceo H. John Rllcy, Jr.

Jamec R. Hewell, founder, chaimran and ceo, Peachtree Doors & Windows, Norcross, Ga., plans to retire July l, turning over chief executive duties to c.o.o. C.B. Jennlngs.

Jeanette Randolph is now sales mgr. for Olon Belcher Lumber Co., Brent, Al., reports Bnent Belcher.

Lou Muporo ic thc now v.p.-ralcr & mktt. for Ralpb Wilcon Plartics, Tomple, Tx. Blll DlGretrno ir now nationrl salcr & mttg. mgr., and Donnlo Lucu, ralcs & mttg. mgr.-dircct acct8,

I*Ann Fenion bas been namod plywood salee mgr. for Willametto Inductries' planto in Moncune, N.C., and Cbcster, S.C. Tony Bebcr ie new to plywood s8les.

Crndrce Hobbs has boen nancd wood beating ralcs mgr. at Wcyerhaeuser Wood Productr, Plymoutb, N.C., reports 8cn. mgr. JcflOut0en.

Blll. Welch is the new mgr. of Lowe's, Sparta, N.C.. succeeding Robcrt L. Cenon, who has retired after 23 yedrs with the cbain. Phll G. Stevens. KinSsport, N.C., was named area gen. mgr. of the year, and Llnwood Mann is new to Eales at Sanford. N.C. At Nortb Wilkesboro, N.C., Hq., new operations specialists are Lerry Melton, outdoor living; Trece Clonch, gardening products, and Greg Forester, hardware. New divisional mdsg. mgrs.: Ray D. Benfleld, building commodities; Steve M. Eller, lumber/plywood & promotional wood products; Mark D. Hulfman, plumbing products; Robert Jolnes, paint & sundries: John L. Kesberger, consumer electronics; Mark A. Kaufiban, hardware & tools;

Mark P. Koch, millwork; Mlchael K. Menser, home decor products; Wade Sanders, outdoor hardlines; Rlck H. Shores, major appliances & kitchen cabinets; Erlc D. Sowder, nursery & gardening products, and J. David Steed, electrical, lighting, heating & cooling.

Jo Ellen Rlchardson, Lowe's, North Wilkesboro, N.C., married Andrew G. Helms Sept. 26, 1992. Daryl Trevor Hammond, Harrisonburg, Va., married Wendy Diane Carter Aug. 15; Jerry Edward Privette, North Wilkesboro, wed Janet Carolyn Bowers July 4, and Jamey Alan Johnson, North Wilkesboro DC, married Tammy Ann Blankenshlp June27.

Tom Lockwood is now national accounts sales mgr. for Klean-Strip, Memphis, Tn.

Peter Klrby has been promoted to forest resources mgr. for Boise Cascade's southem operations, De Ridder, La.

Ed Galt is the new head buyer for Southeast Wood Treating, Jasper, Al., reports Guice Slawson, Sr.

Joe Brummet, Georgia-Pacific, Lexington, Ky., has retired.

Steve Pearce, Domtar Decorative Panels, has been elected pres. of the American Laminators Association, succeeding Tom Wegman, Stevens Laminated Products.

Wayne E. Wiggleton has been named lumber & building materials director for Distribution America, reports pres. Ronald A. Pink. Harlan W. Hummel is now division mgr.-forest prodgcts; John W. Plassmeyer, dept. mgr.-forest products, and Ronald D. Stein, retail sales director.

Dan Schmldt has joined Thomas Lumber, Cumming, Ga., selling moulding grade lumber.

Anne Jyna is handling first aid at Mungus-Fungus Forest Products, Climax, Nv., report owners H u g h Mungus and Freddy Fungus.

Depot'96 Olympics Sponsor

Home Depot has signed on as an official sponsor of the 1996 Olympic sunmer games in Atlanta Ga.

Their $40 million initiation fee gives the chain the right to use the Olympic rings, logos and mascots in its advertising and promotion. The figure represents a sizable jump from the $3.6 million Home Depot spent on advertising in 1991.

Home Depot founders Bernie Marcus and Arthur Blank made tle announcement dudng a closed-circuit television broadcast to thefu 35,000 employees from a rousing sunrise celebration at one of the Atlanca stores' parking lot attended by 160 workers.

95th NHLA Convention Former California Governor

George Deukmejian and Dana Fitzpatrick, first vice chainnan of the National Forest Products Association, will address the 95th annual National Hardwood Lumber Association convention in Chicago, Oct 17-20.

Deukmejian will focus on increasing regulations facing the forest products industry and the effect of environmental litigation on private lands. Fitzpatrick will review what the forest products coilrmunity is doing to pfotect timber supplies from urneasonable regulations.

New directors and a second vice president will be elected. President Henry C. Fulcher Jr., Sitco Lumber Co., will complete his two year term during the convention. Board members leaving office include Wallace A. Buchanan, Buchanan Hardwoods; Joseph W. Mathias, Frank Miller Lumber Co.; James T. Powell, Jr., Canton Hardwood Co.; Gerald Slavney, Thompson-Katz Lumber Co.; Erunet P. "Buck" Vaughn, Jr., Emmet Vaughn Lumber Co.

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