Retail cooperative society
- A large scale retail outlet found in the private sector.
- Formed by customers to enable bulk buying from manufacturing companies at low prices.
- May buy from cooperative wholesale societies.
- Sells to both members and non members.
- Membership is open to customers by paying subscription of buying shares in the cooperative.
- Members are paid dividends after a year or get a rebate which is an amount of surplus shared in proportion to the amount they would have sent in purchasing goods in the cooperative society.
- Sells a variety of goods at low prices .
- May offer special benefits to members.
- Members may be trained in business management.
- Members exchange info and ideas.
Mail order firms
- A large scale retail outlet found in private sector located on the industrial are or outskirts of town.
- Operates from a warehouse.
- Does not need expensive displays.
- Has low rental expenses.
- Advertises through magazines.
- Employs part time agents.
- Sell wider range of goods.
- Goods maybe returned if customer is not satisfied.
- Normally deliver goods .
- Incurs high cost of postage,packing and advertising.
Mail order firms
- A large retail outlet found in the private sector.
- Located in busy shopping areas and out of city centers.
- Operates from cheap premises.
- Sells household goods.
- Buys goods in bulk at low prices.
- Sell at low prices.
- Sell goods on cash and carry basis.
Voluntary chain stores
- Independent retailers may join together to form a voluntary group.
- Buys in bulk from manufactures.
- Buys at low prices and sells at low prices.
- Distribute goods among the group members.
- Advertises on behalf of all members.
Tied Shops
- They sell products or offer services of only one manufacture.
- Usually use the name of the manufacture.
- Have same decorations.
Advantages of large scale retailing
- The retailers have enough capital which enables they to: Buy goods in bulk at low prices
- Advertise goods.
- Build own warehouses.
- Employ specialists.
- ENjoys economies of sale.
- Can prepack goods.
Disadvantages of large scale retailing
- Difficult to manage.
- Loss of personal touch with customers.
- Requires large capital to establish.
- Take long to respond to market changes.
- Fail to make quick decisions.
- Have large overhead expenses and running costs.
Trade Discount
- A deduction from gross invoice price or catalog prices.
- Given by one trader to another .
- Usually the rate is high.
- Not recorded in the books of accounts.
- Encourages customers to buy.
Cash Discount
- An allowance from the net invoice given to any customer who pays promptly.
- Deducted at the point of payment.
- Rate is usually low than that of trade discount.
- Encourage early payment of the amount due.
- May increase the rate of stock turn.
- Recorded in the books of accounts.
Ways of improving sales in retailing
- Review prices and make them competitive.
- Improve quality of services by employing qualified staff.
- Sale quality products.
- Offer free samples to customers.
- Give gifts to customers.
- Open for long hours.
- Advertise continuously.
- Provide personal service ie delivery.
Morden trends in retailing
- These are developments which are taking place in retailing due to changes in technology or other factors.
- E-COMMERCE(ELECTRONIC COMMERCE)
- It is a system of buying and selling goods and services electronically. The system operates through a computer connected to the Internet or on televisions which have satellite connections.
- The product sold should be coded,fully described,in picture form and individually priced.
- When making payment, the customer provides the following details electronically:customer name,Address and account number.
- Choice of delivery.
- Terms of payment.
- Total price of purchasing is displayed on the screen of the customer.
- The system reduces cash payment.
- The electronic shop is opened for 24 hours.
Disadvantages of E-commerce
- Leads to impulse buying and overspending.
- At times the pictures does not show the truth quality of items.
- Lakes personal touch.
- Can be open to hackers and fraudsters.
Vending machines
- These are machines that are installed in busy areas.The machine maybe hired or leased.
- They operate for 24 hours and use the self service method of selling.
- save labor and time.
- Use of a machine increase sells and profit.
DIY Products
- These are products which are semi assembled or in kits and are sold with accompanying instructions.
- The products are mainly sold in supermarkets.
- Customers gain satisfaction by doing the work themselves.
Shopping Malls
- Areas exclusively devoted to shops.
- They consist of a whole range of shops.
Franchising
- An agreement in which a trader gives the right to another trader to use the name of the business and to sell the franchisers products in a given geographical area.Through franchising, the franchise would:
- Enjoy freedom of profit of the business.
- Have high chances of success as the business will be well known.
- Enjoy legal protection from the franchiser.
- Save foreign currency needed to import goods and services as this is often done by the franchiser.
- Be assisted.
- Advertising products and services.
Channels of distribution
- PRODUCER → WHOLESALERS → RETAILERS → CONSUMERS
- PRODUCER → WHOLESALERS → CONSUMER
- PRODUCER → LARGE SCALE RETAILERS → CONSUMERS
- PRODUCER → MAIL ORDER FIRMS → CONSUMERS
- PRODUCER → MANUFACTURE’S OWN RETAILER → CONSUMERS
- PRODUCER → MARKETING BOARD → WHOLESALERS → CONSUMERS(or retailers then consumers)
Hire Purchase
- It is used when consumer’s durable are sold on credit…furnitures,motor vehicle and tv sets.
- CHARACTERISTICS
- A written agreement is a requirement.
- A deposit is paid followed by installments.
- A cooling off period is required if the agreement is signed outside trader’s premises.
- Buyer can cancel the agreement and return the goods when at least half of the purchase price has been paid.
- A court oder is required to repossess goods if the buyer had paid at least one-third of the purchase price.
- ADVANTAGES TO BUYER
- There is no need for the buyer to save money for buying the goods.
- Buyer can use the goods whilst paying for them.
- Can buy expensive goods eg cars, houses.
- Payments are spread over a long time.
- Enjoys an improved standard of living.
By: T.Titus Nyakudyara
Twitter: @NyakudyaraTitus
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