Retail Dogma

Importance of Retail Buying Function

If someone asked you what do you think is the most important function in retail? what would you say?

“Sales!” Right?

That’s probably what 90% of people would say.

From our long experience in this industry, we have come to the realization that a function that is working behind the scenes exerts the biggest influence on the performance of this business.

This function is “buying” or “product sourcing”.

Why Buying is Important in Retail?

1. Buying Drives Sales

Sales people are always grateful for a nice product selection that practically “sells itself” and allows them to achieve their budgets.

The fact is: when the product is right for the market and priced competitively, it needs a minimal effort from the salesperson to push it.

Even if the product is highly priced, but delivers a very high value, for e.g by being of very high quality, it will still sell itself with a little introduction from the sales person.

This is not only appreciated by sales team on the floor, but even customers appreciate a good buyer who was able to curate a nice selection of products.

Usually when this is the case, the same customers turn into repeated customers, because they trust that this store will always have something new for them. This will result in higher sales.

2. Buying Improves Margins

Maintaining an OTB process and ordering the right quantities at the right time ripples quickly into the business in the form of better financial performance.

When your buyers choose the right collection in right quantities your sell-thru will always be high, and you will not need to markdown a lot at the end of the season.

This is a very challenging process in itself, because buyers need to have a scientific process to make the selection, so that at the end of the season most of it will be sold out.

This is usually done by maintaining a feedback loop between the stores and the buying & merchandising team, and by performing inventory analysis at the end of the season and adjusting the buying strategy based on it.


Over time, this will improve the performance of the business, in the form of delivering higher returns on inventory and higher margins.

Read More: Open to Buy: How Much Inventory Do You Need?

3. Buying Drives Traffic

Apart from the above stated advantage of improving margins by buying right, it also drives more traffic to your store.

By driving more traffic I don’t only mean more customers, but I also mean repeated traffic & increased loyalty to your brand.

I experimented changing the way of buying in my brand, by going for wider breadth and narrower depth .

What happened as a result were 3 things:
  • Customers started buying on full price and stopped waiting for the sale, because they knew that by sale time they might not find the item anymore. Improved Margins!
  • Customers made repeated visits to the store, because by widening our breadth we had more variety and so we were dropping new styles every 3 weeks. Increased Traffic!
  • Customers could add on more items to the basket, because the wider breadth meant more variety to choose from. Many happened to like more than one style, so they added them all. Increased Sales!

4. Buying is a Competitive Advantage

I hope by now it is obvious why buying can be your competitive advantage in the market.

If you have the right buyers and the right buying process (that is not based on taste, and also not based on historic numbers alone) you can basically crush the competition, even if this competition is a big established retailer.

Read Also: Using Google Trend for Product Sourcing

Two retailers can have the same store size and location, and exactly the same buying budget. Yet one retailer is able to curate better assortments and buys just the right quantities and so is able to turn his inventory faster and get even more new collections every month. Who do you think will be more competitive and will be able to build customer loyalty?

In fact, I believe that, as a small retailer, you can be much more competitive by utilizing the huge advantage of being agile and acting faster than the big players in your market.

Learn more about buying