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Purchasing retail inventory in quantities exceeding current demand, usually when manufacturers, or other suppliers, offer temporary discounts. When the promotion period expires, the retailer can then sell the remaining inventory to consumers at regular prices, earning a bigger margin of profit. In some cases, an authorized dealer who receives a substantial discount might resell the merchandise to other retailers. Diverted units may end up at "dollar stores" or other less-than-selective retailers to which manufacturers do not sell directly. Those retailers can sell to the public at a discount the authorized dealer is not allowed to offer. Retailers who use aggressive forward buying and diverting practices may make as much profit through these buying practices as they make through nonpromotional sales to consumers. Manufacturers offer discounts to retailers assuming the retailer will pass the savings on to consumers. The discounts also can quickly move a large amount of inventory when the manufacturer needs to reduce stock. As more retailers employ the forward buying strategy, manufacturers such as Procter & Gamble are switching to edlpstrategies instead.
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What is the difference between a forward contract and a cash transaction?
In a forward contract, you are setting the price now for something you'll buy later. A cash transaction involves setting the price for something you're buying today.
What is buyer's credit?
A financial arrangement in which a bank or financial institution, or an export credit agency in the exporting country, extends a loan directly to a foreign buyer or to a bank in the importing country to pay for the purchase of goods and services from the exporting country. Also known as financial credit. This term does not refer to credit extended directly from the buyer to the seller (for example, through advance payment for goods and services). The Practicla example is that foreign Bank makes payment to exporter based on either Letter of Undertaking from the Importer bank or based on their risk on Importer. Letter of Undertaking is simply confirmation by a bank here in importer country to pay to exporter bank thus exporter bank risk get reduced. The Letter of undertaking is issued by Importer bank on the basis of risk on Importer. Simply , Importer Bank takes risk on Importer , This bank sends LOU to exporter bank which in turn takes risk on Imprter bank and makes payment. On fimal day Importer bank recover money from importer and makes payment to exporter bank. This all exercise is done to exploit existance of interest rate arbitrage.
What is letters of credits?
Letters of credit is a binding document that a buyer can request from his bank in order to guarantee that the payment of goods will be transferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the shipment of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability.
What is the classification of credit according to purpose or use?
a) investment credit- capital are on credit first; more on buying properties (lots). b) agricultural credit- for farm improvement (usu. farmers only); loan for acquisition of farm utilities. c) export credit- 4 parties: exporter, local bank, importer and local bank of the importer; need capitalization; payment is only bank to bank. d) real estate credit- same with investment but limited to house and lots. e) industrial credit- for purposes of mining, fishing, factories (usu. businessmen); excludes farmers.
1920 buying on credit was called buying on?
Buying on Margin
What strategy the Indian importer needs to follow to hedge the exchange risk?
it is better to go for forward contract
The British benefited from their mercantilist relationship with the American colonies primarily by?
buying raw materials from the colonies and selling them as finished products
Largest importer of jute in the world?
India is the largest importer of jute in the world.
Where are the importer marks on a Russian sks?
It must have the importer's name and location.
Did you know Auto rickshaw importer address in Bangladesh?
Bajaj Importer, Shantinagar
Where could one buy gypsum boards?
There is a possibility that a local hardware store might have some gypsum boards. However, the simpler way of buying gypsum boards is through an importer.
What is the current status of the US as an exporter and importer?
the us is the world's leading importer and exporter
Is the US an importer or exporter of fossil fuels?
Importer , the U.S. imports petroleum products such as oil .
What was the largest importer of U.S. turkey in 1999?
Mexico was the largest importer of U.S. turkey in 1999
What influenced the Romans to have pottery?
The answer is very straight forward. What influenced you from buying plates or bowls? To be used.
Are there a armsco shotgun?
They are an importer.
Is the US the worlds largest importer and exporter?
The US is the largest importer China is the largest exporter then Germany then the US
