Purchasing Cost Control Strategies at DL Company
|School||Huazhong University of Science and Technology|
|Keywords||Purchasing cost Implicit cost On-line retail Purchasing management|
As an international B2C company, DA Long Company (DL) sells products made inChina to overseas markets directly via internet. In today’s dynamic E-commerce era, DLhas to adjust its strategy to keep up with market competition and its own development.There is not a ready answer for what the best solution is.As a comprehensive retail network platform, DL has a huge number of products andsuppliers. A major problem at DL is that its product lines and market share are keptexpanding, but DL cannot obtain enough orders to support bulk-buying for most of itsitems. How to control the purchase cost on this occasion is a problem to be solved.In addition, there are many indirect costs. For example, staff turnover rate at DL isvery high. This causes a lot of troubles for personnel management. Suppliers often askfor cash payment on small bulk purchases, which make it hard to monitor and stop themisuse of cash by some purchasing staff. Finding solutions for the aforementionedissues are the focuses of this paper.This thesis analyzed both successful and failed cases on purchasing cost control at DL.Especially, we focus on those indirect cost factors not related price such as purchasingpersonnel management. This is because we know price has significant influence onpurchasing cost control but very limited. There may be a bigger room for the improvementon indirect cost control. I will summarize in this paper the reasons for both success andfailures and point out the possible solutions. Practically, the finding of this paper may helpDL use more advanced methods to cut costs and improve the purchasing efficiency. Thisthesis will also provide suggestions for other similar B2C enterprises to better control theirpurchasing costs.