Commerce Financial Decisions

• Consumer


  Someone who purchases goods and services to satisfy their needs and wants
• Goods


  Things that are produced and can be physically touched
• Services


  Something one person will do for someone else with a return of a payment form
• Durable goods


  Can be used many times
• Non-durable goods


  Goods that can be used only once
• Opportunity cost


  What an individual gives up in order to satisfy a need or want
• Types of resources


  • Land
  • Labour
  • Capital
  • Enterprise
• Land


  • Resources that occur naturally, such as forests, coal and fertile soil
• Labour


  • Includes both the physical and mental effort of the working people
• Capital


  • Goods used to make other goods, such as a tractor to produce crops
• Enterprise


  • Ability to combine the other resources of land, labour and capital to earn profits
• Customer service


  Good pre-sales and after-sales service makes you feel like a valued customer and will make you continue buying from that store
• Price


  If it's more than you can afford, you probably won't buy it, customers want the best value for their money, and to ensure this, the Competition and Consumer Act 2010 implemented a per unit pricing guide
• Convenience


  Shoppers may not have a lot of time, so shopping should be convenient, it could be the travelling time, number of stores in that area of shopping hours
• Marketing and advertising


  Average customer is exposed to an estimated 500 marketing strategies per day, so if the marketing campaign is successful, consumers will be influenced into thinking they need this product
• Gender


  A person's gender can influence purchases, as seen on mother's/father's day
• Age


  People's needs and wants change as they age (toys -> phones -> cars -> houses)
• Disposable income


  Refers to the amount of money that households have available to spend and save after income taxes have been accounted for
• Environmental considerations


  Consumers are more aware of the problems caused by throwaway packaging
• Social media


  Social influencers can promote products online
• Cultural factors


  The set of basic values, perceptions, wants and behaviours of a particular community or group, developed from their family status/background
• What To Buy


  1. Shopping around to obtain the best deal is referred to as comparison shopping

  2. Compare the price, quality, availability and after-sales service

  3. Some types of stores are cheaper than others - department stores, discount variety stores, and large specialty stores carry more stock, and therefore are cheaper

  4. Some brands are cheaper than others - reputable brands tend to be more expensive, but when you buy something you also have to consider the quality as well as the price

  5. Don't be pressured into impulse buying
• Rules for Comparison Shopping

  • Think carefully about what you want
  • Shop around for the best deal
  • Investigate the product's features
  • Decide beforehand how you want to pay
  • Check the refund and returns policy
  • Do not sign anything you do not understand or a blank form
  • Compare after-sale service and guarantees
  • Keep all receipts and invoices
• Choosing Where To Buy

  1. Manufacturers produce products and distribute to wholesalers

  2. Wholesalers buy large quantities then sell smaller quantities to retailers, adding to the cost and making a profit

  3. Retailers then sell the products to the customers, also adding to the price

  4. Developments in transportation and technology have provided customers with a large range of locations and sources from where to purchase goods
• Manufacturer


  A company that makes goods for sale
• Wholesaler


  A person/company that sells goods in large quantities at low prices, often to retailers
• Retailer


  A business that sells goods to the public for use rather than for resale
• Mail Order


  A system of shopping where the consumer completes and posts an order form, usually from magazines or catalogues, and then receives their products through the mail
• Mail Order Advantages


  • Greater range of products
  • Convenience for those with limited store access
• Mail Order Disadvantages


  • Issues with delivery
  • Products being different in reality than on pictures
  • Problems tracing a business that only used a PO box
• Online Shopping


  For shoppers who are 'time poor'. The risk of impulse buying is also great when you shop online because you are bombarded with targeted advertising. It is essential to read the policies regarding refunds, returns and privacy before you provide credit card details. You can also use PayPal to protect yourself from online fraud.
• Types of Retail Outlets

  • Convenience stores
  • Specialty stores
  • Discount variety stores
  • Factory outlets
  • Department stores
  • Supermarkets
• Convenience Stores


  • Once located in residential areas but are now commonly attached to service stations, prices at these stores are usually higher than supermarkets with less product variety
• Specialty Stores


  • Examples include hairdresser, newsagents and gift shops, they specialise in one product/service or have limited range of products
• Discount Variety Stores


  • Stores are of plain design with basic customer service, products are usually cheaper, and they attract customers because of their convenience, large stock range and prices
• Factory Outlets


  • Often near the factory where the goods are manufactured, and are normally sold to public at a discount because there is no cost of transportation and wholesalers are not needed
• Department Stores


  • Sell a large range of products, and because they buy in bulk, prices are often cheaper, however, because they offer some sales assistance, their prices are not extremely low
• Supermarkets


  • Originally sold only food items, but are now becoming more like discount variety stores, offering a large range of items for sale
• Different Payment Methods


  • Cash
  • Credit
  • Store Credit
  • PayPal
  • Electronic Funds Transfer - Debit and BPAY
  • Direct Debit
  • Cheque
  • Lay By
  • Book Up
  • Afterpay
• Cash


  The notes and coins issued by the federal government. Consumers normally use cash to pay for relatively inexpensive items, such as newspapers, bus fare or drinks.