Commerce

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

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

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.
- - 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

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.