Business Terms Glossary

Glossary of Terms

• Acceptable quality is a product's fitness for purpose, appearance, lack of defects, safety, and durability.
• Acceptance occurs when the offeree agrees to a proposal.
• Assets are items of value owned by a person or company, available for debts, commitments, or legacies.
• Bankruptcy is when someone gives up control of assets/finances but receives protection from creditors; forced bankruptcy occurs against will.
• Barter involves swapping or exchanging goods.
• Book-up is retailer-provided credit for purchasing goods and paying later, within a set time.
• A budget is a list of income and likely expenditure, enabling individuals to meet needs/wants and organize money for long-term arrangements.
• Capital refers to beneficial goods used to make other goods, like tractors for crops.
• Caveat emptor is a term meaning "let the buyer beware".
• A cheque is a written order to a financial institution (drawee) to pay a specific amount to a person (payee) and is authorized by the drawer.
• Cheques are issued in numbered order from a chequebook.
• Commerce includes the buying and selling of goods/services between individuals and businesses.
• Comparison shopping involves contacting multiple sellers, via phone, internet or in person, to find the best deal.
• Consideration is a final essential feature for a valid contract, requiring each party to give up something of value.
• A consumer is an individual who buys goods/services to satisfy needs and wants.
• Consumer guarantees are rights and remedies for defective products/services.
• A contract is a legally enforceable agreement between parties, outlining details, rights, and responsibilities.
• Creditors are individuals or entities to whom money is owed.
• Debt is a sum of money owed to external sources, such as a bank.
• Disposable income is the money households have for spending/saving after income tax.
• A distribution chain is the process where products move from manufacturer to the point of sale, with prices increasing at each stage.
• Drawee refers to the financial institution that pays the amount specified on a bill of exchange, providing cheque account facilities.
• Drawer is the party that obliges the drawee to pay the payee, which includes writing and signing a cheque.
• Durable goods can be used more than once.
• E-commerce refers to the buying and selling of information, goods, and services online.
• An e-tailer is a retailer that sells goods through electronic transactions on the internet.
• EFTPOS (electronic funds transfer at point of sale) is a computerised system that transfers money from a consumer's account to a business's account.
• It is the most common way to use debit cards. Extra cash withdrawals are possible with EFTPOS.
• Electronic transfer includes BPAY, which uses phone/internet to transfer funds from cheque, savings, or credit card accounts to a business's account.
• Enterprise is the ability to combine land, labour, and capital resources to earn a profit.
• Fixed expenses are regular, consistent expenses.
• Garnishee is a court order enabling an employer/bank to take money from wages/accounts to pay creditors.
• Goods are tangible merchandise or possessions.
• Impulse buying is purchasing without thoughtful consideration or planning.
• Income is money regularly received from work, property, business, investment, or welfare.
• Interest is the price paid to use someone else's money.
• Labour includes the physical and mental effort of workers.
• Land refers to natural resources, like forests, coal, and fertile soil.
• Liquidated means all assets are sold to pay debts.
• Mail order is a system where consumers complete/post order forms (usually from magazines or catalogues) and receive the products by mail.
• Manufacturer refers to the entity that produces products at a low cost.
• Money is a token with an agreed value, accepted as payment for goods/services.
• Needs are essential elements for survival, including food, clothing, and shelter.
• Non-durable goods can only be used once and are non-renewable.
• An offer is a proposal involving one party providing something of value to another in an agreement.
• Online shopping is the act of buying goods and services via the Internet.
• Opportunity cost is defined as what an individual gives up to satisfy a need or want.
• Payee is the person being paid by a cheque, via the drawee.
• Price is the amount of money required to purchase a product; how much a product is valued at.
• Profit is the financial gain remaining after business expenses are deducted from sales revenue.
• Redress means to compensate or set a situation right.
• Retailer refers to physical, in-store shopping services that directly sell products to consumers.
• Rip-off refers to a financial cheat.
• A scam is a dishonest scheme, fraud, or illegal business practice.
• Sequestration order is an order from the Federal Court of Australia declaring an individual bankrupt.
• Services are actions that a party would do for another in return for payment.
• Superannuation is money set aside during one's working life for retirement; commonly called "super".
• A trade union is an organization that represents employees and works to improve their wages and working conditions.
• Unconscionable act refers to any seller practice that is unreasonable and often illegal.
• Variable expenses are expenses that change over time and are not frequent.
• Wants refer to items that are not essential for survival but that individuals would like to have.
• A wholesaler purchases products from manufacturers in large quantities and increases the prices slightly.
• Writ of execution is a court order that enables a court official or sheriff to seize and sell some assets to pay debts.

The Nature of Commerce

• Commerce includes the buying and selling of goods and services between individuals and businesses.
• Consumers are individuals purchasing goods and services to satisfy their needs and wants.

Needs and Wants

• Needs: food, clothing, shelter
• Wants: car, phone, computer
• Opportunity cost is what an individual gives up to satisfy a need or a want.

Goods and Services

• Goods are tangible and can be physically touched; durable goods can be used many times while non-durable goods are for single use.
• Services are actions one party does for another in return for payment.

Resources Used by Producers

• Land includes natural resources (forests, coal, fertile soil), which are non-renewable.
• Labour includes physical and mental efforts of workers.
• Capital refers to goods used to make other goods (e.g., tractors to harvest crops).
• Enterprise is the ability to combine land, labor, and capital to make a profit.

Factors Affecting Consumer Decisions

• Customer service leads to customer retention and repeat business
• Price is a consideration, as consumers seek the best value - lowest price for the best quality
• Convenience is desired by consumers
• Marketing/advertising influences consumers to think they need products
• Gender influences types of purchases and services.
• Age influences types of goods and services individuals go for.
• Disposable income restricts amount of money you can put aside for spending - and hence influences choices.
• Environmental factors are a consideration due to growing awareness of environmental issues.
• Social media credibility influence purchases through endorsements
• Cultural factors have an impact on behaviours and decisions

Making Financial Decisions

• Consumers must decide how much of their income to save
• Income includes money received from work, property, business, investment, or welfare.
• Financial plans enable to get the greatest possible satisfaction from their income.
• Budgets help individuals meet needs/wants, provide long-term financial coverage, and improve wellbeing/quality of life.

Purchasing Choices

• Most goods and services are available from multiple retailers and e-tailers.
• Products can vary in cost
• Comparison shopping is essential for obtaining the best deal
• Essential to comparing price, quality, warranty, and after-sales service.
• E-commerce simplifies comparison shopping so impulsing buying is more common

Comparison Shopping Rules

• Before you buy, consider what is needed
• Shop around for great deals
• Look at what features there are
• Decide your budget
• Know the refund policy
• Ask questions before signing
• Ask about any sales and guarantees
• Keep receipts handy

Choosing Where to Buy

• Manufacturers sell products at a raw, cheap price.
• Wholesalers buy products form manufacturers and then sell them at a slightly higher price.
• Retailers purchase products from wholesalers and significantly increase prices.

Distribution Chain

• The process of products passing from manufacturer to when they are sold.
• Prices rise as the product gets closer to the end customer, as everyone tries to earn a profit

Pricing Definitions

• Manufacture price is the price wholesalers pay which is normally raw and cheap.
• Wholesale price is what retailers pay.
• Recommended retail price is the the normal cost
• Discount price - is a lower rate than the RRP

Mails Orders

Online Shopping

Types of Retail Outlets

Purchasing

• Local - convenience stores or arcades which can restrict customers on purchases of items
• Regional - department stores located in large shopping complexes that allow easier access to a wider variety of good
• Interstate/ Global - with the internet consumers can now buy from anywhere

Impulse Buying

• Buying something without thinking it through, and makes people feel good because of an emotional connection to the item

Method of payments

• Consumers can select to pay by
• Cash - easy but easily stolen
• Credit - promises to payback what they bought. It enables impulse buys that can damage your credit rating
• Store Credit - offers discoutns to those that sign up to cards but have high interest payments
• Paypal - easy online intermediary with high security
• EFT - debit cards or EFTPOS are easy to use
• BPAY or Bpay - transfers payments via the internet
• Direct Debit - the bank handles payments via withdrawing money from you account - but payments might be rejected is you don't have enough

Scams

• Can be misleading for advertising, or offer money just to collect new personal information
• referral selling is illegal
• unordered or unsolicted goods
• special prizes that ask for more money
• get-rich-quick schemes or pyramid selling

Contracts

• Legal Agreements with verbal or written stipulations that should include

1. offer and what is exchanged
2. acceptance of the offer
3. all considerations

Organisations for consumers

Australian Competition and Consumer Commission

• Operates nationally for any law violations Australian securities and investment commision
• Helps people manage fraud Commonwealth Ombudsman
• Aids by providing accessible insurance and advice for issues NSW office of fair trading
• Assists with home or motor sales - for issues that have wronged the consumer NSW Ombudsman
• Investigates complaints between businesses Choice
• Offers information and guidance in magazines

The Media

• investigates consumer issues and scams

Consumer Redress

• Consumers have basic rights. You can refund faulty goods

Things to member when lodging a complaint

• get the persons details
• keep record everything
• purchase proofs

NSW Fair Trading

• Offers formal complaining to lodge office to negotiate

The NSW Civil and Administrative Tribunal

• Deals with consumer claim,s lodging issues in all sectors.
• This can incur a fee, and depending on the complexity can take months

Consequences of poor financial management

• Debt can effect your wealth, relationships and put you into bankrupcy
• It can impact your health and mood

How can we aid or strategies for people in finacial trouble

• creating a budget and rolling it to pay for an emergency
• seeking finacial assistance with banking

Effective Financial Management

Fixed expenses: Constant costs

Variable expenses: Are not constant but not as frequent

• Need to total
• your expenses so you get a view as to your spending

The equation

Savings = Income - Savings.

Budgeting

• progressive total is the amount gathered overtime

Superannuation

• Is compulsary for retirerment which deposists overtime and when you retired can be access the fund
• This can be retail, industry based or offers smaller investments Trande Unions
• are orgs who aim to have members improve working waged and conditions