Purchase

Purchase means to buy. It essentially grants purchasers ownership of a good or service in exchange for money. It can be termed as an economic agent’s demand for a commodity and for effective demand to materialize the presence of purchasing power is an important factor. Monetary income, price of a commodity, price of substitutes, tastes’ and preferences of consumers are some important determinants of demand (for a commodity). Purchase related jobs are available in supply chain management and logistics arena. Purchases aggregated for an entire nation is termed as aggregate demand in economics. Aggregate demand is a major determinant of a country’s price level.

Purchase can be broadly categorized into corporate purchases and consumer purchases. Consumer purchases involve economic discipline of consumer (buying) behaviour. Understanding the elements of customer decision-making is crucial for marketing personnel to design effective marketing programs.

Consumer Purchase Types

Consumer purchase decisions can be broadly classified as follows:

• Minor New Purchase
• Major Re-Purchase
• Minor Re-Purchase
• Major New Purchase

Online purchases have gained in popularity with today’s tech-savvy consumers.

Corporate Purchasing Orders

Some types of corporate purchasing orders are listed below.

• Blanket purchase order
• Standing purchase orders
• Independent contractor purchase
• Regular purchase orders
• Order expiration notice

Business Purchase Types

Some types of business purchase categories are enlisted below.

• Straight Re-Purchase
• New Task Purchase
• Modified Re-Purchase

Purchase Tax

It is an ad valorem tax, which is levied on consumer goods. Ad valorem literally means ‘as per value’. Purchase tax calculations are based on wholesale prices. A wholesaler pays this tax but transfers ‘burden of tax’ to retailers. They, in turn, pass it on to customers.

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Definition Sources