Forward buying

This article covers meaning & overview of Forward buying from operations perspective.

Published by MBA Skool Team in Operations and Supply Chain Terms Last Updated: May 10, 2023Read time:

What is Forward buying?

Forward buying is a process related to retail inventories, financial instruments, assets etc. wherein they are purchased in quantity excess to demand to counter future price rise. This is practised by retailer when they find manufacturers selling the product at a discounted price and purchase the items bulk. Now when the price of the product is set to original price by the manufacturer, retailer can make profit by selling the item purchased at low price earlier.

This is used when manufactures are overstocked and they want to clear the inventory. They give the discounts to the retailer and retailer also get benefited by getting better profit margins.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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