Author Question: Your friend Bill comes to you for advice because of your amazing business prowess. He would like to ... (Read 64 times)

lunatika · **on:** Jun 29, 2018

Your friend Bill comes to you for advice because of your amazing business prowess. He would like to start his own business, but he is concerned about the high failure rate. If possible, he would like to mitigate his risk somewhat. He also has limited capital and not much business experience. You recommend that Bill consider opening a _______________, but you warn him that one disadvantage to doing so is that he would have _____________.
A) wholesaler; more debt
B) retailer; less control
C) wholesaler; less time
D) franchise; less control
E) direct sales organization; limited promotional opportunities

Question 2

What factors affect the purchase method that business customers choose?

Kimmy · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

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.