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
- 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.
- 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
- Retail means to reduce into small pieces or to reduce quantities.
- 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..
- 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.
- ITENERANT TRADERS
- These traders moves door to door selling goods on foot,bicycles or push carts.
- Products sold include foodstuffs and cheap jewelery.
- FLEA MARKETS
- They sell used or old goods.
- Sell a variety of goods.
- Pay rentals of the space occupied to town councils.
- MARKET STALL HOLDERS.
- occupy small areas.
- Sell a variety of goods.
- Pay rentals for space occupied.
- MOBILE SHOPS
- Use vehicles as moving shops.
- Usually sell on cash basis.
- Sell a variety of goods.
- Usually go where there is business.
- 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.
- 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
- 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.
- 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.
- 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.
- 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.
- VARIETY CHAIN STORE
- has characteristics same as multiple shops but offers variety of goods.
By: T.Titus Nyakudyara
Twitter: @NyakudyaraTitus
1 comment on O-level commerce Notes(page2/5)