Very Short Question and Answers - Meaning of Purchase and Sale

Purchase is the process through which a person gets the ownership of some goods or properties transferred in his name from another, on payment of money.

A sale is a process through which the ownership of some goods or properties is transferred from one person (seller) to another person (buyer), for a price.

Yes, purchase and sale always go together because whenever there is a sale, there is also a purchase and vice versa.

The two parties are the 'seller' and the 'buyer'.

The buyer pays money to the seller for buying goods or services for his use or consumption.

The seller accepts money from the buyer and gives up his right over the goods or services.

Businessmen produce goods or services for others’ use so that people can buy them for a price, enabling businessmen to earn more money than they have spent in production and thus make a profit.

Profit is the reward for risk-taking by businessmen and the return on the capital invested by them.

Sale of goods is necessary for the very existence and growth of a business over time.

A buyer should consider: (i) their needs and (ii) the price affordability of the commodity or service.

A business should identify customer requirements to design the product or service accordingly and ensure customer satisfaction.

A business should continuously improve the product or service to ensure customer satisfaction.

By ensuring proper distribution so that the product or service is easily accessible to customers.

The price should be set so that customers can afford the product or service, making it more likely to be sold.

Customers should be informed about the product and its benefits to promote sales and ensure their satisfaction after purchase.

Marketing functions involve all activities related to identifying customer needs, designing products, pricing, promoting, making goods available, and ensuring customer satisfaction.

Selling is a part of the broader marketing function, with marketing including all activities from product development to customer satisfaction, while selling focuses only on the exchange of goods for money.

A cash purchase occurs when the buyer pays the price immediately while taking delivery of goods.

A credit purchase is when the buyer is unable to make payment while taking delivery and requests some time for payment, which the seller agrees to.

The seller should ensure the creditworthiness and paying capacity of the buyer before agreeing to a credit sale.