What factors affect the purchase method that business customers choose?

Question

What will be an ideal response?

Answer 1

Although no two business buyers do their jobs the same way, most use one or more of the following purchase methods: description, inspection, sampling, and negotiation. The most straightforward is description. When products are standardized and graded according to certain characteristics such as size, shape, weight, and color, a business buyer may be able to purchase simply by describing or specifying quantity, grade, and other attributes. Certain products, such as industrial equipment, used vehicles, and buildings, have unique characteristics and may vary with regard to condition. Depending on how they were used and for how long, two products may be in very different conditions, even if they look identical on paper. Consequently, business buyers of such products should base purchase decisions on inspection. Sampling entails evaluating a portion of the product on the assumption that its characteristics represent the entire lot. This method is appropriate when the product is homogeneous-for instance, grain-and examining the entire lot is not physically or economically feasible. Some purchases by businesses are based on negotiated contracts. In certain instances, buyers describe exactly what they need and ask sellers to submit bids. They then negotiate with the suppliers that submit the most attractive bids. This approach is generally used for very large or expensive purchases, such as commercial vehicles. This is frequently how government departments conduct business. A buyer and seller might negotiate a contract that specifies a base price and provides for the payment of additional costs and fees. These contracts are most commonly used for one-time projects such as buildings, capital equipment, and special projects.