Buying In

Posted in Marketing and Strategy Terms, Total Reads: 440

Definition: Buying In

This could refer to a management buy-in wherein a team from outside the company raises the capital, buys the company and then becomes its new management. It often has to compete with other teams to do this. A buy-in also refers to the willingness to support a decision taken in management.

Parties that buy into a decision often have been involved actively in its formulation and the deliberations leading upto it. A buy-in in securities refers to the situation in which a buyer has to repurchase securities because the original seller did not deliver the securities on time, or did not deliver them at all. This could be done to cover a short or a stock in the commodities exchange. In this case, the buyer buys from a new seller and the defaulting seller has to compensate the price difference.

When it comes to a contract, a buy-in refers to the act of quoting a price well below the estimated costs in the hopes of pricing it higher in the long run and getting a good margin. Buying-in gives us a share and a stake in the company performance. The decision to buy in is taken after many rounds of deliberations and is thus, considered to be a reliable one.

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