Transactional Buying Vs Relationship Buying – Which is Better?

Conducting business in today’s dynamic world has become much more complex and competitive. This is primarily due to the wide array of choices available to a firm in every aspect of conducting the business. This decision-making process becomes much more complex if the firm is bigger as complexity increases with the size of the company.

Cost considerations and choosing options which are cost-effective are very important in ensuring that the business is profit-yielding. Even in terms of buying, there are various parameters to be considered before finalizing on the type of purchase by the decision-making authority of the company.

Procurement, being an important aspect has to be decided on the requirements on the company in the most cost-effective way. The new school of buying categorizes the buying procedure into two – Transactional Buying and Relationship Buying – based on the relationship and terms between the buyer and the seller.

What is Transactional buying?

Transactional buying, as the name suggests, is limited to buying one transaction at a time. In this type of buying, the procurement managers are chiefly concerned about “today’s” purchase wherein the buyer thinks and acts in the present. The pricing and terms of sales drive the buying process. The buyer negotiates aggressively with the service provider and tries to get a better deal for themselves. The procurement team often demands more concessions and frills from the purchase. Once the transaction is over, the contract between the seller and buyer ends.

From the seller’s perspective, the only exciting thing is the limited duration of the service period. However, this type of buying is not lucrative for the seller as the negotiation is tough and the salesperson might end up giving a lot of concessions than originally decided. In case of a pure transactional buying, complex/critical tasks should be avoided.

There is another kind of transactional buying called the ‘Pseudo Transactional Buying’. Here, the service provider extends the services on the product sold over a longer period of time. They maintain the product on an ad hoc basis based on the buyer’s need. Here, the contract is limited to the single task/s however the buyer will avail the services over a pre-decided period of time.

What is Relationship buying?

The aim of this type of buying is to maintain a strong relationship with the seller for a long period of time. The buyer and the seller tend to enjoy a mutually beneficial relationship. The seller is considered as a business partner of the buyer. Trust and confidence of the buyer, coupled with delivery and demonstrating expertise of the seller is the key to success in relationship buying. Both the parties look for a win-win situation before entering the partnership. As the relationship is for a longer term, the buyer should ensure that the seller also gets a handsome profit from the partnership and extend the help and support to the seller.

We have mentioned that a large firm, with complex operations should not conduct a transactional buying process. Does this mean that big firm or even a medium-sized firm should go for relationship buying and a small firm should go for a transaction buying? No, the decision of the procurement process does not just depend on the size of the firm. There are criteria to be considered based on which such decisions are taken.

Few of the criteria are as follows:

Relationship Buying Transactional Buying

Nature of Work Complex Simple

Volume of Work High Low

Frequency of work Daily/Weekly/Monthly (Periodic) Ad Hoc

Involvement of the buyer High Low

Transactional buying vs Relationship – Which is better?

To sum it all up, a firm, whether it is a big, medium or small-sized, can choose either transactional buying or relationship buying or even pseudo transactional buying. Considering the hassles of contract creation process, many firms generally prefer relationship buying. The frequency of contract creation is more in a transaction buying process vis-à-vis a relationship buying process. However, due to the constant pressure to reduce cost, transactional buying is also being considered. This type of buying comes to the rescue when there is a cost constraint. It is a boon for the small/ sole proprietorship firms as it is easier for them to follow it. Even the large companies do not fall behind in experimenting this type of buying. The bigger firms are either floating a separate unit/company so that they can take the advantage of transactional buying. Transactional buying and Relationship buying both have their own pros and cons. A good business manager should select the procurement process based on the requirement of the company. Considerations should be made based on what product should be sourced, whether it is periodic or not, how involved the firm wants to be and if the maintenance is complex or simple.

4 Important Tips to Consider When Buying a Cake Online

If you are looking to purchase a unique cake, we suggest that you keep a few important things in mind. If your local stores don’t have the cake you are looking for, you can order one online. Chances are that online stores will meet your needs. In this article, we are going to discuss 4 tips that will help you learn how to purchase your favorite cake from an online store. Read on to find out more.

Look for Some Service Providers in Your own City

In cities, you can find a lot of online cake delivery portals. What you need to do is find out if they deliver cake in your home town. This is important because some online delivery services may not deliver cakes in some cities.

It’s even better if you choose an online store that runs a physical store in your area. Going with a provider that has a huge collection of cakes is a great idea.

Choose Something Unique

Most people prefer online delivery services over a traditional shop as they can choose from a lot of options. If you need a normal cake with a bit of icing, you may head to your nearby bakery shop to place your order.

On the other hand, if you are going to buy online, we suggest that you buy something unique. The good thing is that you can check out a huge collection of cake varieties on the websites of cake sellers.

Based on your personal taste, you can choose from different designs and flavors. So, the idea is to stick with a unique style and design.

Like Taste, Design Matters a Lot

At online bakery stores, you can check out different flavors, such as pineapple, red velvet, vanilla, orange, mango, blueberry, strawberry, black forest, and butterscotch. It’s important to keep in mind that the taste of these cakes is quite important. However, that doesn’t mean that you should make your choice based on the taste alone.

What you should do is consider the ingredients and flavors as well. Also, consider the appearance of the cake as well. The combo of flavor and design will make the cake look great. So, the importance of a good design can’t be denied.

Consider the Bestselling Cakes Section

You can enjoy a lot of benefits by buying a cake online. One of the main benefits is that you can check the reviews before placing your order. Aside from this, you can check the best selling section to find out the most popular items.

This is how you can find out which cakes are the most popular among buyers. So, don’t forget to check this section of the site before making the final decision. However, you should also check the other parts of the site.

In short, if are going to buy cake for your birthday or someone else’s birthday, we suggest that you follow these tips. Based on these tips, it will be much easier for you to opt for the best cake delivery service.

RV Buying- New Versus Used

Cost is one of the main factors concerning new versus used RV’s, but there are several other factors to consider too. If you’re only going to use the RV two weeks out of the year, a used RV might be your best decision. On the other hand, if you are planning on going fulltiming or traveling cross country, a new RV with a full warranty would be a better choice.

Speaking of warranty, if you do decide a used RV is your best choice, check to see if there is any type of warranty available. If you buy a used RV from a private owner it is normally AS IS with no warranty. This is true with many RV dealers too. Replacing an RV refrigerator or other major appliance can be very costly. Most RV dealers will offer an extended service plan or contract if the used RV meets the service plan criteria. You can also purchase these plans from RV clubs and reputable websites on the Internet. The age of the unit will factor into the cost of the plan but you should be able to negotiate with the dealer concerning a service plan. Make sure you read all of the fine print and understand exactly what is covered and what is not covered in any type of service plan or contract you purchase. Many times service plans offer different levels of coverage based on the cost of the plan. You also want to be sure that other RV dealers and repair facilities will honor the service plan you purchase. It won’t do you any good if you need repairs while you’re traveling and nobody will honor the plan.

Another factor to consider between buying new or used is how long you plan to keep the RV. What I mean by this is if you buy an RV with the thought in mind that as soon as you get your next pay raise you’re going to upgrade to a larger RV, it would be best to consider buying used. RV’s depreciate, they do not appreciate. If you buy a new RV and trade or sell it within the first couple of years you will lose a substantial amount of money. In many cases a used RV has already suffered the brunt of the depreciation and you don’t stand to lose as much if you get rid of it sooner. This of course will depend on how much you pay for the used RV. Most RV dealers use the NADA guide for Recreation Vehicles to determine used RV pricing, http://www.nada.com.

Used RV prices are based on the age of the unit, the condition, options and mileage, if it’s a motorized RV’s. The NADA guide has wholesale and retail pricing for used RV’s, and all NADA pricing assumes the RV is in good condition, and proper working order. Ask to see the NADA price for the unit you are considering purchasing or look it up on the Internet. For accurate figures you will need to know the make, model, year, options and for gasoline motorhomes, the chassis manufacturer and mileage. You wouldn’t pay full Manufacturer Suggested Retail Price (MSRP) for a new RV, so you shouldn’t pay full NADA retail price for a used RV either. Some used RV’s are in more of a demand than others, but if the used RV is in good condition and everything operates properly a fair price would be somewhere between NADA wholesale and retail price.

Another consideration when thinking about purchasing a used RV is the finance terms and interest rates. Because the RV is used, banks offer shorter finance terms and higher interest rates compared to new RV financing. See the finance section of this chapter for more information.

If you decide to purchase a used RV make sure that all of the systems and appliances operate properly, and that there is no type of hidden damage that can’t easily be seen. Damage caused by water leaks can be hard to detect and extremely costly to repair. If you are not knowledgeable about RV’s you should take someone with you who is, to inspect the unit you are considering purchasing. It may be possible to hire somebody to thoroughly inspect the unit before you buy it. Most RV dealers will give you a walk through orientation of the RV and demonstrate that everything is operating properly. I recommend that you purchase an RV training video on the type of RV you are buying and view it prior to the scheduled walk through. You will have a much better understanding of how everything works and you can ask more targeted questions.

Be sure to consider the cost, how you plan to use the RV, warranty, and how long you plan to keep the RV when deciding whether to buy new or used.

Happy Camping,

Copyright 2006 by Mark J. Polk, owner of RV Education 101

Having Troubles Managing Your Real Estate Investments? Consider Taking Professional Help

Real estate investors often have a bunch of concerns when it comes to selecting, buying, and selling properties. The market has been volatile for a while, and even the best investors are unable to predict changing norms and trends. This is exactly where a property buying service can come handy. Property buying services, for the uninitiated, deal with the real estate deals on behalf of their clients. No matter whether you are buying your first home or want to explore your investment portfolio, these services can ease things for you considerably. In this post, we will talk about property buying services and how the right team can help you.

Do I need help?

This is probably the first question that people have in mind. Well, contrary to what many people believe, real estate agents propel the industry in more ways than one. They work with buyers and sellers alike, so at any point of time, they have more knowledge of the local market and the factors that can influence a deal. While every property buying service might have a different approach to the job, they essential ease things between the buyers and sellers. Many overseas investors often express interest in local properties, but things don’t materialize because they don’t have the necessary expertise and help. With property buying agents and real estate services, you can choose to assign your project to someone, and they will take care of your monetary and other interests.

What can you expect?

Well, real estate agents and property buying services do a lot more than just searching and scouting properties. As an investor, you can rely on their insight, expertise and experience at all times for almost everything. Yes, the internet has changed things, and it is possible to check for local listings online, but before you can get ahead with the deal, background check and negotiation are aspects you cannot ignore. If you are not around, your agent will check everything and ensure that your interests are protected. Also, you can give them the power to bid at auctions, and as required, they may also advise you on selling properties for a profit. In short, just like people work with investment bankers, property buying services are also same, except for the fact that they deal in homes, lands, mortgages, short sale, and more.

However, before you select an agent for your deal, do your homework. Expertise and experience are two elements that eventually matter in sealing complicated real estate matters. If a service has been around for more than a decade, they should be able to offer client references on request. Also, they should be accessible at all times and must offer services for overseas clients. Regardless of the complications involved, they should also handle the paperwork and negotiation process. Make sure to check their team details, because only local agents have the required liaisons and industry contacts that help in closing a deal.

Check online now to find the best real estate agents in your area.