Internal Purchasing and Supply

Introduction

Online shopping is a worldwide megatrend in todays’ world that makes products available to consumers all over the globe. Purchasing of all products from different parts of the globe has been made available for every use. unlike other forms of technology has made the world a global village.

ASOS is an example of an online website that makes buying products easier. It is a British online fashion and cosmetic retailer founded in third June 2000, whose primary prospects were young adults. They sell and ship over 850 brands as well as their line of cosmetics and clothing. The websites ship their products to over 196 countries from their main branches, located in Europe, the UK, and the United States of America. There are a lot of factors that affect ASOS shipping and purchasing, and I will articulate them in this article, focusing on aspects relevant to British dissertation help.

How Culture, Language, and Communication Affects the ASOS Purchases

Culture

Culture and cultural beliefs have a very big impact on the purchases made all around the globe. How people perceive things is very different depending on the location of the individual, which is highly influenced by their cultural beliefs. ASOS has been affected by the culture of its users in different parts of the world. It is a cloth selling website, and different cultures perceive different clothes differently. Therefore, they do not buy the clothes as it is seen as inappropriate according to their culture, an example being Asia. According to Valarezo et al. (2018 pg 270) due to mistrust in the online websites, some do not use it as they believe it is a scam and their products will not be delivered

Language and communication.

Communication is key when it comes to transactions, and when it becomes a problem, then a transaction will not occur. The language barrier is a major problem in most online websites, ASOS being one of them. Across the globe, there are different communities that speak different languages. Therefore, it gets difficult to understand the needs of the consumer, fully bringing a lot of difficulties not only in purchasing but also in shipping the products. The language barrier has therefore led to fewer purchases to some countries or communities where language is a barrier leading to low sales in such areas.

Factors Affecting Foreign Exchange Rates for ASOS

Terms of trade

When the rates of imports get higher than the rate of exports from a country, the revenue gets lower. When ASOS ships the products, they get to be charged more for shipping products into that particular country, making them incur losses instead of the estimated profit they could have made. The vice versa could happen when the consumers see the shipping fee to be higher. They opt not to ship their products from ASOS, leading to lower sales than expected.

Interest rates

A change in interest rates affects the rate of exchange rates and currency value as well. When ASOS experiences a higher positive interest rate, the exchange rates, and currency value also get high. All this leads to higher exchange rates, and higher exchange rates lead to more profit on their side as the export fee will be less compared to if there was low interest ( Novanto, Triyanto and Sauqi, 2020)

How Currency Exchange Results in Financial Risk

Increased volatility of larger markets can lead to a large gain or even larger loss to a firm. When the net returns of a company are exposed to a new currency and a larger foreign exchange rate volatility, then it could lead to a large gain or a large loss. That is why it is considered to be very risky.

Effect of Counter-Trade On Oversea Sourcing for ASOS

ASOS, as a website identify and select suppliers of different cloth line, then sell them on their website along their cloth line and accessories. They do this by selling the products of their suppliers and paying them in different ways. Doing this could be very risky for the company as the losses incurred during this transaction is on them. The suppliers of the items are at low risk when it comes to the sales made as their role is to just supply the product, then the rest is up to the ASOS. They, therefore, incur more losses, and a lot of risks are on them.

How Forward Buying Benefits ASOS Purchasing Strategy

When there are promotions on different commodities, such as the black November, ASOS takes advantage of this to buy more clothes. They then hold on to this in their inventory till when the offer ends. The products are stored till when the demand gets higher, and the prices get higher when demands get high. By doing this, they get to make a double profit on their sales as they bought them when the prices were very low. Their sales are also high during this period as their prices will be a little bit lower compared to other companies. The advantage, therefore, is higher sales and higher profit.

The Need for ASOS to Achieve Continuity and Security of Supply Requirement

Continuity of sales

The users of the products need the products, and lack of consistency from the suppliers could make the users stop buying from that particular firm. There are many different firms and websites that provide the same services, and when the firm they are used to stop or get unreliable, they get to shift to another one. This leads to loss of customers and an even lower sales volume ( Annunen et al. 2021)

A continuous flow of profit

When the customers have trust in the firm, they will continuously buy from the same firm. The buying of the products leads to fast supply and movement of products, meaning higher sales volume. According to Shahtahmassebi and Wright (2021) When they get restock the products often, then the level of sales increases hence the higher profit.

More consumers of their products.

Trust is key when it comes to online selling and shipment of products. ASOS needs to work on building the confidence of their customers so that they get to continue buying from them. This reassurance is a form of security to the consumers leading to higher sales and profit. The supply should therefore be continuous so as to increase the sales volume (Chadhuri et al. 2018).

Reference

Annunen, P., Mustonen, E., Harkonen, J. and Haapasalo, H., 2021. Sales capability creation during new product development–early involvement of sales. Journal of Business & Industrial Marketing.

Chaudhuri, A., Boer, H. and Taran, Y., 2018. Supply chain integration, risk management and manufacturing flexibility. International Journal of Operations & Production Management.

Pakurár, M., Haddad, H., Nagy, J., Popp, J. and Oláh, J., 2019. The impact of supply chain integration and internal control on financial performance in the Jordanian banking sector. Sustainability, 11(5), p.1248.

Yu, Z. and Chen, Y., 2018. Research on the Optimization of After-Sales Parts Supply Chain Management Based on Supplier Management—Taking SAIC General Motors After-Sales Parts as an Example. Open Access Library Journal, 5(11), pp.1-23.

Shahtahmassebi, G. and Wright, L., 2021. Profit and loss manipulations by online trading brokers. arXiv preprint arXiv:2107.14055.

Valarezo, Á., Pérez-Amaral, T., Garín-Muñoz, T., García, I.H. and López, R., 2018. Drivers and barriers to cross-border e-commerce: Evidence from Spanish individual behavior. Telecommunications Policy, 42(6), pp.464-473.

Novanto, H., Triyanto, R. and Sauqi, F.Z., 2020. The Effect of Economic Growth and Foreign Exchange Rates on the Realization of Tax Receipts. Solid State Technology, 63(5), pp.3796-3806.

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