Buyer and Seller Relationship in the retail industry

Topics: Supply chain management, Supply chain, Research Pages: 14 (3930 words) Published: October 5, 2013
1. Introduction

For many years buyers and sellers in the clothing retail sector have been battling to answer the question as to why it is difficult to build a steady relationship with one another. This can be due to the knowledge gap that there is in a lack of understanding on the issue. We aim to thoroughly associate the concepts of Collaboration, Information Sharing, Joint Relationship Effort, Dedicated Investments, Commitment and Trust, Satisfaction and Performance with the different buyer - seller relationships that exist in the clothing retail sector. Thus the problem being investigated is the unsteady relationship that exists in the clothing retail sector between buyers and sellers. The study will be using a survey consisting of 37 questions that will be issued to buyers in the industry. A sample size of 500 clothing companies will be used in Cape Town, South Africa which was selected to answer the surveys. The research method is quantitative in nature. Thus the study aims to carefully examine how buyers and sellers interact within the supply chain relationship. Some papers have touched on supply chain relationship issues, but have not done the association with these particular concepts our study aims to use. The main objective of our research is to provide buyers and sellers with the necessary information to assist them as to why there are certain imperfections in the relationship.

2. Literature Review

Some research has be done on the concepts collaboration, information sharing, joint relationship effort, dedicated investments, commitment and trust, satisfaction and performance, which gave an insight to how these variables develop, change and how they are maintained in the context of buyer-seller relationship. Therefore for the purpose of this study twelve (12) articles written in the context of buyer and seller relationship will be used to define and explain the above mentioned concepts and how it is used throughout our research study.


Collaboration can be defined as latest development in supply chain management which involves the process of working together with your suppliers, business partners or clientele in achieving a common goal that benefits all parties (McLaren, Head & Yuan, 2002). Ellinger, Daugherty & Keller (2000) observed what exactly links marketing and logistics within a company’s integration, as well as measures of performance that are both objective and subjective in nature. They found and identified collaboration as a variable that impacts a relationship in a progressive way in that it increases sharing information and ideas and leads to partners functioning together.

Information sharing

McLaren, Head & Yuan (2000) has identified information sharing as the exchange of important company information with your supply chain partner for purposes that would assist each partner in the future. McLaren et al. (2002) discusses how a partnership between the buyer and seller can be beneficial for both parties where information sharing is of key importance. Their findings were that, creating partnerships between buyers and sellers were beneficial for both parties and that the success of information sharing depends on the type and size of the company as well as which mechanism they used for information sharing.

Joint relationship effort

Joint relationship effort refers to the combined determination and drive that is put into collaboration between buyers and sellers. Monczka, Petersen, Handfield & Ragatz (1998) argued for example that when task organisation is performed between buyers and sellers, the buyer can then form a perceptive trust in their partner’s abilities which will later form a solid trust in their relationship.

Dedicated investments

Knemeyer, Corsi & Murphy (2003) defined dedicated investments as particular resources and goods that are transferred to another party that is highly important towards producing services and products. They tried to prove...

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Dahlstorm, R. McNeilly, K.M. Speh, T.W. 1996. Buyer – Seller Relationships in the Procurement of Logistical Services.Journal of the Academy of Marketing Science, 24(2), pp.110–124.
Ellinger, A., Daugherty, P., Keller, S., 2000. The Relationship Between Marketing/Logistics Interdepartmental Integration And Performance In U.S. Manufacturing Firms: An Empirical Study. Journal Of Business Logistics, 21(1), pp.1-22.
Handfield, R., Monczka, R., Petersen, K., &Ragatz, G., 1998. Success Factors in Strategic Supplier Alliances: The Buying Company Perspective. Decision Sciences, 29(3) pp.553-577.
James, A.E. et al., 2004. An Assessment Of Supplier - Customer Relationships. Journal Of Business Logistic, 25(1), pp.25–62.
Kauser, S. & Shaw, V. 2004.The influence of behavioural and organisational characteristics on the success of international strategic alliances.International Marketing Review.21(1): 17-52.
Knemeyer, A. M., Corsi, T. M. & Murphy, P. R. 2003. Logistics outsourcing relationships: Customer perspectives. Journal of Business Logistics.24 (1), pp.77-109.
McLaren, T., Head, M. & Yuan, Y. 2002. Supply chain collaboration alternatives: Understanding the expected costs and benefits. Internet Research: Electronic Networking Applications and Policy. 12 (4), pp.348-364.
Moberg, C. R. &Speh, T. W. 2003.Evaluating the relationship between questionable business practices and the strength of supply chain relationships.Journal of Business Logistics.24 (10), pp.1-19.
Mohr, J. &Spekman, R. 1994. Characteristics of partnership success: Partnership attributes, communication behaviour and conflict resolution techniques. Strategic Management Journal.15 (1): 135-152.
Simatupang, T.., Sridharan, R
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