Purchasers and buyers seek to obtain the highest quality merchandise at the lowest possible price for their employers. The work generally involves determining which commodities or services are best, determining the suppliers of the product or service, negotiating the lowest price, and awarding contracts that ensure that 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 and select suppliers based upon price, quality, availability, reliability, and selection. 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 from suppliers. Meetings, trade shows, conferences, and visits to suppliers' plants and distribution centers also provide opportunities for purchasers and buyers to examine products, assess a supplier's production and distribution capabilities, and discuss other technical and business considerations that bear on the purchase. Although this describes the general activities of purchasers and buyers, specific job duties and responsibilities depend upon the type of commodities or services to be purchased and on the employer.
Purchasing professionals who are most often employed by government agencies or manufacturing firms are usually called purchasing directors, managers, agents, industrial buyers, or contract specialists. These workers acquire product materials, intermediate goods, machines, supplies, and other materials used in the production of a final product. 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 is often 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. Manufacturing companies have begun to recognize the importance of purchasing professionals and increasingly involve them at most stages of product development. Their ability to forecast which materials will be most available, inexpensive, and acceptable for production standards can affect the entire product design. For example, potential problems with the supply of materials may be avoided by consulting the purchasing department in the early stages of product design.
In addition, there is a trend toward limited-source, long-term contracting. 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. Increasingly, purchasing professionals work closely with other employees in their own organization. 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.
Some purchasing managers who work in the industrial sector and specialize in negotiating and supervising supply contracts are called contract specialists or supply managers.
Contract specialists in the Federal Government typically use sealed bidding, but sometimes use negotiated agreements for complex items. Government purchasing agents and managers must follow strict laws, statutes, and regulations in their work. These legal requirements are occasionally 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 are commonly referred to as buyers or merchandise managers. Wholesale and retail buyers are an integral part of a complex system of production, 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 or to commercial establishments and other organizations. Buyers in retail firms 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 they have the ability to accurately predict what will appeal to consumers. Buyers must constantly stay informed of the latest fashions and trends. 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. However, 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 retai 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 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.
Although purchasers and buyers of farm products may work in manufacturing or wholesale or retail trade, many are self-employed brokers who store grain and sell it for a commission. These individuals may also speculate on grain prices.
Computers are having a major impact 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 efficiency in 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. As well as monitoring their company's sales, buyers 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. All this allows buyers to better concentrate on the selection of goods and suppliers.
Purchasers and buyers must stay informed about new products and services.
Most purchasers and buyers work in comfortable, well-lighted offices at stores, corporate headquarters, or production 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 Thanksgiving until early January.
Buyers and merchandise managers often work under great pressure since wholesale and retail stores are so competitive; buyers need physical stamina to keep up with the fast-paced nature of their work.
Traveling is usually required and most purchasers and buyers spend at least several days a month on the road. High fashion buyers and purchasers for worldwide manufacturing companies often travel outside the United States.
Purchasers and buyers held about 624,000 jobs in 1992. Purchasing agents and purchasing managers each accounted for slightly more than one-third of the total while buyers accounted for the remainder. Almost all worked full time.
About one-half of all buyers and purchasers worked in wholesale and retail trade establishments such as grocery or department stores. One-fourth worked in manufacturing.
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 accept applicants who have completed associate or bachelor's degree programs from any field of study, but prefer individuals with a business background. Manufacturing firms tend to put a greater emphasis on formal training and many desire applicants with a bachelor's or master's degree in business, economics, or technical training such as engineering or one of the applied sciences. Regardless of academic preparation, new employees must learn the specifics of the employers' business.
Although training periods vary in length, most last several 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 are often 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 production planning to learn about the material requirements system and the inventory system.
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 and communication skills because buyers spend a large portion of their time supervising assistant buyers and dealing with manufacturers' representatives and store executives.
Purchasing professionals must be able to analyze the technical data in suppliers' proposals, make buying decisions, and spend large amounts of money responsibly. The job requires the ability to work independently as well as a part of a team. In addition, these workers must be able to get along well with people to balance the needs of departments within the organization with budgetary constraints. They may consult with lawyers, engineers, and scientists when involved in complex procurements.
Experienced buyers may advance by moving to a department that manages a larger volume or by becoming a merchandise manager. Others go to work in sales for a manufacturer.
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.
In high technology manufacturing firms, 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 Certified Purchasing Manager (CPM), conferred by the National Association of Purchasing Management, Inc. and Certified Purchasing Professional (CPP) and Certified Purchasing Executive (CPE), conferred by the American Purchasing Society, Inc. upon candidates who pass examinations and meet specified educational, experience, and related requirements. 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, Inc. The CPPB is earned by passing a two-part written examination and meeting certain experience requirements. To earn the CPPO, a candidate must have additional purchasing and supervisory or management experience, pass a three-part written exam, and undergo an oral interview assessment.
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 Certified Associate Contract Manager (CACM) or Certified Professional Contract Manager (CPCM). Candidates for these certifications must have related work experience, complete academic course-work, and pass written exams. These designations primarily apply to contract managers in the Federal Government and its suppliers.
Employment of purchasers and buyers is expected to increase more slowly than the average for all occupations through the year 2005. Demand for these workers will not keep pace with the rising level of economic activity; mergers and the resulting consolidations of buying departments along with other changes such as limited source, long-term contracting will reduce the need for purchasers and buyers. The increased use of point-of-sale inventory control, artificial intelligence systems, electronic data interchange, and other automated systems will restrict demand further. Consequently, most job openings will result from the need to replace workers who transfer to other occupations or leave the labor force.
Persons who have a bachelor's degree in business should have the best chance of landing a buyer job. A master's degree or bachelor's degree in a technical field will be an advantage for those interested in working for a manufacturing or industrial company. However, graduates of 2-year programs in purchasing/buying should continue to find good opportunities, especially in small firms.
Median annual earnings of purchasers and buyers were $33,067 in 1992. The middle 50 percent earned between $23,092 and $44,684. The lowest 10 percent averaged less than $13,959 while the top 10 percent earned more than $56,581. 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.
Purchasing agents in the Federal Government averaged $24,400 in 1993 and contract specialists averaged $43,800.
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.
Workers in other occupations who need a knowledge of marketing and the ability to assess demand are retail sales workers, sales managers, comparison shoppers, manufacturers' and wholesale sales representatives, insurance sales agents, services sales representatives, procurement services managers, and traffic managers.
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Reprinted with Permission of U. S. Department of Labor