RETAILING
Retail is the sale of goods and services from individuals or
businesses to the end-user. Retailers are part of an integrated
system called the supply chain. A retailer purchases goods or
products in large quantities from manufacturers directly or
through a wholesale, and then sells smaller quantities to the
consumer for a profit. Retailing can be done in either fixed
locations like stores or markets, door-to-door or by delivery.
a) Nature of OwnershipSole ProprietorshipPartnership Joint VentureLimited Liability Company (Private &Public L.L.C).
BASES FOR CLASSIFICATION OF RETAIL UNITS
Sole Proprietorship
(1)Ownership The business is owned by a single individual.
(2) Management and control Being small in size, it is managed by the owner himself. However, he may have some paid workers to assist him. In any Case, the ultimate control rests in his hands.
(3) Finance The necessary capital to run the business is provided by the sole owner. However, he may borrow from other sources such as friends or bank as need arises.
Mutual Contribution. There cannot be a partnership without contribution of money, property or industry (i.e. work or services which may either be personal manual efforts or intellectual) to a common fund.
Division of Profits or Losses. The essence of partnership is that each partner must share in the profits or losses of the venture.
Co-Ownership of Contributed Assets. All assets contributed into the partnership are owned by the partnership. If one partner contributes an asset to the business, all partners jointly own it in a special sense.
Mutual Agency. Any partner can bind the other partners to a contract if he is acting within his express or implied authority.
Partnership
Wider concept compared to collaboration Coming together of 2 companies
◦ In order to promote a new business activity for mutual benefit.
Facilitates inflow of capital and technology ◦ From developed country to developing country.
benefits both partners facilitates industrial growth government approval necessary
Joint Venture
Is a simple way to protect personal assets, unlike a Sole Trader, the Limited Liability Company does not tie your personal assets to the company.
Has an organized management structure comprising the board of directors, secretaries (optional) and shareholders who manage and own the Limited Liability Company respectively, and are a prerequisite for Limited Liability Company formation.
Can accumulate capital quickly by issuing shares upon formation and any time after formation.
Is a flexible structure with the potential for growth, changes can be made after Limited Liability Company registration to the company name, capital and membership.
Characteristics of Limited Liability Company
b) Operational Structure:Independent trader(one retail outlet operation)Multiple or Chain storeFranchisingConsumer co-operativeLeased Department
An independent trader is a person who trades
independently. A person who is not employed by
a company or an organization but trades solely by
him/her self, mostly else known as self-employed.
Trader should trade alone first before he or she decides
to trade with other people. This allows the individual to
develop his own philosophy and his own understanding
about himself and the market.
Independent trader
Multiple chain stores are simply a string or group of retail outlets which
can sell virtually anything from groceries to fast food to dry goods. They
are supplied from large warehouses to reduce overhead and increase the
buying power. Most of these multiple chain stores are public limited
companies which have some degree of centralized control.
a multiple chain store is usually defined as one with ten or more branches.
if it has less than ten branches it is a chain store .there are two types.
1) a specialized multiple chain store concentrating on one main product line.
2) a variety chain store selling a wide variety of goods.
Multiple or Chain store
1. Risk aversion: Successful franchisees are risk averse. They are willing to
take some risk but want that risk to be as small and controlled as possible.
2. Hard-work affinity: Successful franchisees have a
willingness to do whatever it takes to get the job done. This attitude shows in their every action--putting in long hours, handling multiple tasks.
3. Strong people skills: Successful franchisees always have excellent interpersonal skills and can effectively interact with their employees and customers.
Franchising
It is a voluntary association of adult persons registered under the Co-operative Societies Act.
The capital is divided into shares of small value and these shares are subscribed by its members. .
It is controlled in a democratic set up. The accounts of the society are subject to audit by the
registrar of co-operative societies. One member has one vote irrespective of his holding
Characteristics Consumer co-operative
It refers to department in a retail store that are rented to an outside party.
First off - you will pay a rental for the space used - this is normally by the square footage however, some companies want a percentage of the business –
Usually this is done in case of department and
specialty stores and also in discount stores.
Leased Department
Department store Discount store Specialty store Hyper market
c) Length & depth of Merchandise:
1.Large size: A departmental store is a large scale retail organization.2. Wide range of goods: It provides a large variety of merchandise from 'pin to plane'
at one place.3. Specialisation: A departmental store is divided into several departments,
each specializing in one line of goods.4. Attractive appearance: A departmental store is housed in an impressive building
which is fully furnished and well decorated.5. Huge investment: A departmental store requires huge investment of money.
Department store
A discount store is a type of department store, which sells products at prices lower than those asked by traditional retail outlets
Discount stores are not variety stores, which sell goods at a single price-point or multiples thereof (£1, $2, etc.). Discount stores differ from variety stores in that they sell many name-brand products, and because of the wide price range of the items offered.
Characteristics of Discount store
Specialty stores are small stores which specialize in a specific range of merchandise and related items.
1. Large size: A departmental store is a large scale retail organisation.2. Central location: A departmental store is locality in a main market. All the
departments are organised under one roof in a large building.3. Wide range of goods: It provides a large variety of merchandise from 'pin to plane'
at one place.4. Specialisation: A departmental store is divided into several departments,
each specializing in one line of goods.
Characteristics of Specialty store
In commerce, a hypermarket is a superstore
combining a supermarket and a department store. The
result is an expansive retail facility carrying a wide
range of products under one roof, including full
groceries lines and general merchandise. In theory,
hypermarkets allow customers to satisfy all their
routine shopping needs in one trip.
Characteristics of Hyper market
Direct selling Television shopping Vending machine retailing
Non store retailing
Involves personal contact between salesperson/retailer
and customers at any convenient place
It can be door delivery or club
It can also be telephone interactions between retailers
and customers.
Direct selling
It is a retail format in which existing and prospective
customers watch a TV program demonstrating products
and then placing order for the same by telephone ,e-
mail and internet
Mainly depends upon the TV ads
Television shopping
Products or services are placed in a
machine and dispensed to customers when
they deposit cash
These machines offer consumers greater
convenience 24 hours a day.
Vending machine retailing
Top Related