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O-level commerce Notes(page2/5)

O level commerce notes

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.
    • 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..
    • 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.
    • These traders moves door to door selling goods on foot,bicycles or push carts.
    • Products sold include foodstuffs and cheap jewelery.
    • They sell used or old goods.
    • Sell a variety of goods.
    • Pay rentals of the space occupied to town councils.
    • occupy small areas.
    • Sell a variety of goods.
    • Pay rentals for space occupied.
    • Use vehicles as moving shops.
    • Usually sell on cash basis.
    • Sell a variety of goods.
    • Usually go where there is business.
    • Owned by individuals.
    • Formed between rural/urban residential areas.
    • Open for long hours
    • Sell a variety of goods.
    • Sell in very small units.
      • 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.
      • 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

    • 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.
    • 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.
    • 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.
    • 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.
    • has characteristics same as multiple shops but offers variety of goods.

By: T.Titus Nyakudyara
Twitter: @NyakudyaraTitus

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