O-level commerce Notes(page2/5)

Reasons for the elimination of Wholesalers

• it is cheaper to buy from manufactures.
• All manufactures goods are branded and easy to sell to the retailers.
• Manufactures prefer to sell directly to retailers or even to consumers.
• Goods which have slow rate of turnover such as cars,jewelery and aircraft are sold directly to consumers.
• Some manufactures have opened their ow retail or factory shops.

Reasons for selling at Marketing boards

• To store agricultural produce.
• To reduce monopoly in selling goods.
• To facilitate ready market for such goods.
• To facilitate exportation and importation of goods.
• To promote research and development of agricultural products.
• To inspect,weigh and grade agricultural produce.

Types of Marketing Boards

1. GMB
   • Buy grain from farmers.
   • Sell grain to consumers eg millers and exporters.
   • Stores grain.
   • Evens out supply of grain.
   • Prevents shortage of grain.
   • Control price of grain.
   • Collects grain from farmers.
   • Delivers grain to consumers.
   • Finances farmers e.g provides inputs.
   • Preserves grain.
2. TOBACCO MARKETING BOARD
   • Buys tobacco from farmers.
   • Sells tobacco to local and foreign companies.
   • Stores tobacco.
   • Prevents shortages of tobacco.
   • Provide inputs.
   • Inspect,grades and weighs tobacco.

Retail trade

1. Retail means to reduce into small pieces or to reduce quantities.
2. A retailer is the middle person between wholesalers and consumers in small quantities.

Factors to consider when estabilishing a retail outlet

• adequate capital to start the business.
• The demand of type of goods to be sold.
• Good management skills.
• Consider accessibility to to the retail outlet eg transport and communication.
• Target group.
• Competition.
• Legal aspects eg licenses.
• Experience in the line of business.
• Nearness to supply points.
• whether to buy,rent or build premises.
• Development potential of the area.
• Nearness to customers.
• Labor requirements.
• advertising cost involved.
• Storage facilities.

Functions of retailer to manufacture and wholesalers

• Buys goods from manufacture and wholesalers or provides a ready market for the manufacture.
• Buys goods in bulk.
• Clears manufactures production lines.
• Advertises good on behalf of manufactures.
• Stores goods

Types of small scale retailers

Small scale retailers are usually owned by individuals,found in the private sector,few legal formalities required-In Zimbabwe owners need daily or monthly licenses to operate, eg hawkers,peddlers..
1. ROADSIDE TRADERS
   • These locate themselves where many people pass and display goods on movable stalls.
   • They sell fast moving goods.
   • They need short term licenses in order to operate.
2. ITENERANT TRADERS
   • These traders moves door to door selling goods on foot,bicycles or push carts.
   • Products sold include foodstuffs and cheap jewelery.
3. FLEA MARKETS
   • They sell used or old goods.
   • Sell a variety of goods.
   • Pay rentals of the space occupied to town councils.
4. MARKET STALL HOLDERS.
   • occupy small areas.
   • Sell a variety of goods.
   • Pay rentals for space occupied.
5. MOBILE SHOPS
   • Use vehicles as moving shops.
   • Usually sell on cash basis.
   • Sell a variety of goods.
   • Usually go where there is business.
6. INDEPENDENT SHOPS
   • Owned by individuals.
   • Formed between rural/urban residential areas.
   • Open for long hours
   • Sell a variety of goods.
   • Sell in very small units.
   ADVANTAGE TO RETAILERS
   • • The retailers requires little capital to start the business.
     • The retailers benefit by having low overhead expenses.
     • Few legal formalities required.
     • Flexible changes in the market.
7. DISADVANTAGES TO CUSTOMERS
   • • goods are usually sold at high prices.
     • Slow in saving customers.
     • Choice of goods is limited.
     • Normally do not offer guarantees.

Large scale retailers

• These are large shops with enough capital to buy in bulk with cash at low prices from manufactures.
• They have large shopping space and sell a wide range of products.

Types of Large scale retailers

1. SUPERMARKETS
   • It is large shop of minimum floor area of 188 square meters which sells household goods and grocery on cash and carry basis.
   • Has many checkout points.
   • Has security measure.
   • Offers baskets and trolleys.
   • Display goods according to use.
   • Sell branded and pre-packed goods.
   • Sell goods at low prices.
   • Goods are individually priced.
   • Goods are usually fresh.
   • Offer self service method of selling.
   • Daily used commodities at the back.
2. HYPERMARKET
   • A large shop of minimum selling space of 4500 square meters.
   • Situated on the outskirts of town where land is cheap and plenty full.
   • There are good communication links eg road network.
   • Provides a car park.
   • Sell foodstuffs and household goods.
   • Sell goods at low prices.
   • Sell goods at cash and carry basis.
   • Sell branded and prepackaged goods.
   • Display goods according to use.
   • All goods are individually priced.
   • Goods sold are usually fresh.
   • Provides parcel counters.
   • May provide restaurants,banks,garages.
   • Has security measures.
   • Normally open during holidays.
3. DEPARTMENT STORE
   • A multi-storey buildings with several shops under one roof.
   • Located in the city center where land is expensive.
   • Sell a wide range of goods.
   • Each department have a department manager.
   • Sells high quality merchandise.
   • Offers luxurious facilities eg carpets,lifts,music etc.
   • Employ trained ,uniformed staff who offer services.
   • Offers credit and delivery facilities.
   • Sells goods at high prices.
   • Has centralized accounting,advertising and purchasing systems.
4. MULTIPLE SHOPS
   • Located in the busy shopping centers eg growth points, shopping malls.
   • A shop with several branches.
   • all branches have similar fronts and use same name.
   • Sell narrow range of products or one line of products.
   • Each branch has a branch manager.
   • Head office buys goods in bulk for all branches.
   • Has own warehouses and transport.
   • All branches sell at the same price.
   • Stock and staff can be transfered from one branch to another.
   • May offer credit facilities.
   • Head office advertises for all branches.
   • Overhead expenses are spread since each branch pays for its rentals,water and electricity.
   • Customers can return goods at any branch.
   • Losses made by one branch can be shared by other branches.
   • Can manufacture their own goods.
5. VARIETY CHAIN STORE
   • has characteristics same as multiple shops but offers variety of goods.

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By: T.Titus Nyakudyara
Twitter: @NyakudyaraTitus

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