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What is buyback ?

A buyback is a type of sales strategy added by manufacturers to their products and sales deals. It basically is offers to buy back all the merchandise, which are prove to be no longer profitable for the buyers. Buyback is normally applied to sales of any merchandise.

For instance, a flower pot vendor were to offer his or her product with buyback guarantee to home store chains. This offer is usually an opportunity for home store owners for they can still return the goods to the flowerpot retailer the pot that they bought if no one wants to buy it in their store. However, there are certain conditions along with this great offer. It is possible that the seller may have to negotiate of the percentage that he or she will buyback. Another condition is that the seller may agree to buyback all his products but only for a certain amount.

Buybacks are usually associated in some divisions of jewelry and clothing industries. It is also associated and offered if the prospective buyer is planning to get a bulk order. The details of buyback agreement mainly depend on the relationship between the buyer and the seller, the cost margins and the sales policies of both parties. Normally, vendors in the fashion industry have close connections with discount chains that are very willing to buy products that have been bought back.

Even if buyback are commonly associated with merchandise, it also applies in business deals and stock market using the same idea as the one that occurs in merchandise industry. Stock buyback happens when a certain company wishes to buy back the stocks that they have already sold. In this case, the power of every individual share left on the market increases because of the numbers of shares drops. There are lots of reasons why a company wants to get hold of their old stocks. Regarding stocks, the company’s shareholder must make a vote prior to the authorization for the repurchase.

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