Commerce Notes: Types of Retailers: Retailers without shops: Peddlers, Hawkers, Street-Marketers etc.

Retailers with shops: Sole Traders, Partnerships, Multiple Shops, Chain Stores, Departmental Stores, Supermarkets, Hypermarkets etc. Retailers not really retailers: Wholesale-retailers, Mail-order trader, Manufacturer-retailers etc. Small-scale retailers: operating as sole traders or partnerships Large-scale retailers: operating as limited companies Co-operative societies: often manufacturers, wholesalers (CWS), retailers (CRS) Wholesalers selling directly to consumers: by mail-order, discount trading Manufacturers selling directly to consumers: mail-order, personal callers (Call Center) Types Peddlers Features/ advantagesdisadvantages to the firm Advantages to customers Traveling is avoided Access to service is at doors Wide bargaining Inspection easier for housewives Exchange is sometimes assured by the trader similar to peddlers Disadvantages to customers Narrow comparison with similar goods Can be of substandard Price speculation in bargaining is uncertain Exchange is narrow Prices are offered high varieties of goods are limited

Who carry their wares hanging or pulling about and sell to the customer at its door.

Hawkers Use cart or van to bring goods to door. e.g. Greengrocery for vegetables, paraffin, cosmetics, households etc. Protected by a law Market overt (fr. open) protects the buyer against the bargained bought goods from uncertain rightful vendor. hire a stall in the market from local authority for few rentals more stationary than other smaller moving traders Sole trader or partnership Backbone of retail trade

Street traders/ open markets

Wider bargaining Less traveling Fast access Prices are reduced at late hours

Buying at own risk of quality Exchange is improbable Price speculation is difficult Can be deceitful in quality or standard May be of substandard quality

Small Market traders

Very small overheads Prices tend to be lower Traveling is less for pedestrians Ample bargaining Comparison of similar goods is possible Personal service promoted so that increased service produce increased turnover to increased benefit Friendly dealing and recognized by name often Temporary credit Longer shop hours Locality, nearness, least traveling Independent

Independent small traders/ corner shops/ local shops/ town center conventional shops

face price competition, display and hygiene less capital to improve unfavorable buying from supplier for small quantity goods that are left in the shelves for long may not be in good condition when bought by customer

Co-operative retail societies, CRS

First ever Rochdale Pioneers in UK in 1844 having 22 members open membership democratic control (one member one vote) distribution of surplus in proportion to purchases as shoppers discount card or coupon stamps or in-store special offers to members to use the space for personal benefit payment of limited interest on capital political and religious neutrality cash trading dividends on invests to members twice a year in proportion to the their purchases As members of public form CRS, CRSs from CWS. formed first CWS by CRSs set up in 1862 CWSs profit shared between member CRSs and CRSs profit shared by public members Operates like departments having differing facilities as one organization and sometimes like multiple stores having centralized purchasing and administration Generally a limited company under the control of board of directors Branch manager runs the branch but has vary little in running Sales, stocks records are

management Convenient opening hours Considerable specializations happen sometimes Home delivery sometimes Specialist advice on particular buy Fair quality at fair price makes up CRSs profit Representatives of the members are democratically elected Promotion of education, convalescence after illness, youth camps for children, assistance with funeral expenses etc. May own factories, transport services, farms etc. non-members can buy goods also from society

It needs to keep records and overhead increased As it grows big, small retailers are handled loosely Increasing non-members are outweighing retailers as it grows

Multiples or multiple shops/ chain stores/ variety stores e.g Currys, Burtons, H. Samuel, Marks & Spencer, Boots

Zonal warehouses for quick delivery transport costs minimized Can have Bulk buying with greater discounts having larger multiples can set competitive

Non-provision of credit loses customers Traveling to stores may be inconvenient if only for few things Often difficult to get advice, self-serviced Shopping is impersonal

the chemist,

Department stores

sent periodically on which they decide on slow or fast moving instruct suppliers to contract, expand or stop production, shifting to other areas etc. HO sends out inspectors to make check on all branches Run from a central head office controlling centralized administration, buying, warehousing, advertising Through branches having same name and brand Uniform look and feel in outfit/ shop-fronts and decorations Similar goods at all branch at standard price fixed by the HO Pharmaceuticals, clothing, food, shoes etc. Goods are usually on display, customers select personally, try them if wearable, prices are competitive - clearly marked in tags Spread risks over all branches, losses of few branches are covered by profitable branches and by opening new in developing areas Many shops under one roof as departments Departments are vied with each other Catering for well-to-do customers as luxury shopping Coffee lounge, restaurant, food court, kids corner, gym may be available Separate catering in different departments Tend to be in centers of the city Departments are not independent in buying or service centralized bulk buying with discounts from

price Efficiency achieved through employing specialist departments at HO in price and quality Specialized in limited class of goods e.g. grocery, furniture, appliance etc. May have many shops but under one roof Competitive, attractive prices May go for diversification in selling multiple lines Shop assistants or catering is nearby Deal mostly in cash Customer facilities are kept minimum to keep overhead down selfservice at some fast foods etc. Easily identifiable as branded chain Economizes on advertising by centralization Selling selected brands, goods are of identical quality at all branches Goods need to be exchanged are exchanged at any branch Sometimes specialized in particular line of goods most large departments have developed mailorder for customer who can not visit can have wide variety like variety chains but occupy larger premises and exclusive decors shopping is made as pleasant as possible toilets, rest rooms, writing rooms, telephone booths, restaurants, cloakrooms, hair dressing saloons, banking services, car park, child care nurseries etc.

because customers name not recognized As it grow larger it gets difficult to manage and serve

overheads may be higher as for city centers having high rental prices are high because most are located in city centers having high rental, rates, extra services to customers considerable traveling to city centers regarded by some as exclusive for rich people

Supermarkets

manufacturers Economic advertising for all departments Mostly limited companies, management is delegated to a general manager, section manager, departmental managers Each departments are keeping separate accounts Self-service Usually a bigger department store having more than 250 sqm of floor space Cut-price, rapid sales Sometimes like Chain stores, buy in bulk, get discount, set competitive price One stop selling - Wider range of pre-packed goods and households Goods are attractively displayed, multiple check-out counters Most competitive price to other types Uses loss-leaders resting below market price covered by high prices of other goods Larger premises: for superstores at least 2,500 sqm of selling space; for hypermarkets at least 5,000 sqm of selling space Tend to be single large storey buildings At a main crossroads in an outlying area near urban areas Rely heavily on cars, transportation sometimes offer bus service Larger car parking Larger range of food and non-food goods Extremely competitive price Self-service Credit/debit card facility

prices are tagged, fixed prices, accept electronic cards goods can be ordered over phone delivery and credit are usually available

May have amenities e.g. air-conditioning, car parks, toilets, telephone booth etc. Self-service reduce costs aided by highly trained managers

Need to be busy buying as sales are fast Open display encourages pilfering, shop lifting Less personal service Impulse buying - Lured to buy goods not essential

Hypermarkets and Superstores/ shopping centers e.g.Carrefour

Out-of-town location having extensive car parks, cheap petrol, tyre fitting, lower prices to cover customers conveyances Lower rates and rentals to help overheads down Warehouses are accessible for transportation and carriers, congestion-free Very large bulk buying from manufacturers enjoy large discounts, set very competitive price Restaurants, play areas for added facilities

It declines the business in the town centers Traveling, congestion, spare hours required Alternative markets are not available for unavailable goods Permission needs to be granted for premises

Mail-orders/ TV shopping

Off-peak shopping hours At service for customers who live far a way from nearest shop Use catalogs, commission agents, advertisements with hotline, sending catalogs to contacts Sale or return basis Available now a days on television channels Bulk buying gives enjoyable margin and low price Payment is done either by Cash On Delivery, Cash With Order or by installments where agents available in money order, pay order, postal order, cheque Can expand through agents, adverts

Wholesalerretailers

By manufacturers of durable consumer goods Straight from factory or showroom

Shop arrangement avoided Customer conveyance avoided Maintenance avoided Degradation avoided Hire-purchases of even non-durable goods Credits are offered e.g. 20 weeks Additional offers Automatic declared credit and no formality Selection of items at leisure with family, friends and neighborhoods and more orders placed Enough time to be reconsidered Instant credit persuades more to buy goods on impulse which they would not buy otherwise Minimal repayment amount influence more to buy Commission may be achieved Goods are delivered at their doors Doesnt need expensive high street premises unused or spare space is enough, less overhead Catalogs provide a permanent and enticing shop window Repayment installment is light-weight Convenient shopping by way of weekend newspapers or TV adverts Goods offered at bargained price May allow the right to return if not suitable Covered by the OFT and Fair Trading Act 1975 and Mail Order Protection Scheme Hire-purchases may be available Price cuts are available Less overheads and

Expensive catalogs Advertisements can be misleading and the goods may not be of quality expected by customer Advice cant be obtained easily because buyer seller doesnt meet Perishable goods cannot be bought Expensive distribution Quality of goods may be difficult to assess Need to meet heavy packaging and postal charges for each unit even for returned ones as unsatisfactory e.g. clothing Goods cant be inspected in advance May suffer bad debts and its collection costs After-sales service unavailable waiting time for delivery exchange of goods is more difficult

Costs of showrooms, advertisements, storage, transport, collection of payments reduces

Contact with the customers are made by advertisements Skimming all wholesaler and retailer profit enables to cut the price very considerably Operate like multiples Allow others interested investors to run branches in return for certain payments for the privilege of using the name Promoting and capitalizing a popular brand On agreement between franchisor and franchisees Franchisees have to arrange, buy and rent premises Franchisee may buy all materials or pay a royalty, a fixed percentage of sales Franchisor can attract entrepreneurs and share franchisees profits Franchisee has the advantage of using a well-known and widely advertised name without having own advertisements, reputation Assistance in the form of cheap supplies on behalf of franchisee Operates like wholesalers who buy large quantities from manufacturers, get wide discount and sell direct to the public of specialties e.g. electrical goods, stereo equipments, freezers and television sets etc. Located edges of the city center but near main roads Advertise widely in the national and local press Able to sell at very competitive prices by reducing staff and

more selling

revenue

Franchising/ Branded retail outlets Wimpy, McDonalds, Kentucky Fried Chicken etc.

Advising on the location, training on running franchise

Discount stores/ discount warehouses e.g. Comet, MFI

Home delivery can be available


Shopping precincts/ Shopping Mall, Plaza, Arcade, Complex Bull Ring, Victoria Center, Brent Cross Center etc. Voluntary chains

overheads and cutting out some of the retailers profit Less catering service and may charge for delivery of large items Developed in response to the growth of out-oftown superstores Large car parking Wide range of conventional shops To compete with supermarkets independents try together by joining together and organized via wholesalers, can enjoy bulk buying at discounts Often lay down minimum standards for members, insist to carry a certain level and range of stock Mostly found in grocery trades Individual retailers place orders with wholesalers within the group who can then place larger orders with manufacturers or importers, gained a discounts, passed on to retailers thereon Nationwide adverts are undertaken by the group as a whole dissolving individual identity As a big group they may make a loan for improvements Access doorsteps E.g. encyclopedia (doorstep selling) E.g. green grocery, grocery, ice-cream, households (mobile shops) E.g. housewives arrange parties to sell goods or households, jewellery, clothes (party-selling) Most convenient in contrast with other types Wide range of links, resources, searches may

Access only for pedestrians pedestrianization Escalators, lifts, info desk, security patrols,

Combine both features of multiples and department store Have look-alike branches throughout the region or country Mostly non-exclusive wide range of goods appeal more middle class Occupy less space alike department store Self-selection and selfservice open counter display Shop assistance, electronic cards, credits, hire purchase may be available

Occasion/ party selling/ vacation selling/ Mobile shops/ Open saleout/ Doorstep selling

Doesnt have to travel that far Goods demonstrated at neighborhood Known familiarity

Prices are higher Competitors goods are not compared or seen

Internet eshopping

Human interaction void Complete self-serviced Unaided by retailers attendants

Automatic vending

help Virtual shopping, carts, catalogs, selection, automatic checkout and payment execution Perfect match could be found by following desired links Most brands have their portals and enough information about recent, coming up items and their cut prices, discounts indifferent of any quantity Pre-set pricing, ample information, ease of selection Variety of payment, delivery and ordering schemes Electronic cards are allowed Resembling Mailordering for widest range of goods Goods found from different vendors can be compared with each other and with manufacturers price Enumerable number of vendors local or international Exchanges of second hand goods are flexible Coin-operated vending machine Confectionery or soft drink or energizer Located in public places e.g. railway stations, hotels, big retailers premises

Information, scheme is preset May be attractive and fraud in transaction Having growing security, still is a matter of risk of disclosing some very confidential loss and consequences Some times payment is not confirmed In case of variable local and international location, delivery is uninsured and delayed Customers are harassed by deviant portals exploiting through fictitious, overstated, false offers Goods cant be inspected before buying

Convenient access Available for 24*7 hours a day

Prices are high Machined are sometimes jammed and its difficult to find someone out to help

exchange adds on newspaper or Internet Local markets/ weekend markets

Few overheads, low price Bargaining takes place End of day goods are sold-off at cheaper prices

Difficult to exchange goods Hampered by bad weather, situation Uncomfortable shopping

Held on the same days each week Consists of number of stalls Cover wide range of goods Similar like small markets

Types of Wholesalers: a) Traditional wholesalers: i. Large general wholesalers: operating very large warehouses. Showrooms in suitable centers. Can operate in national scale. ii. Specialist wholesalers: operating in a more limited field but carrying a detail inventory in their particular sphere of trade. Can operate nationwide. iii. Regional wholesalers: serving a particular area. Mostly in perishable field, manufactured goods, delivery of prepared foods, frozen foods, fruit and vegetables, meat etc. iv. Local wholesalers: operating on small scale consumer durable fields. b) Cash and carry warehouses c) Retailer protection wholesalers d) The CWS e) Mail-order wholesalers Types Cash and carry warehouses Features

Operating as supermarkets but dealing in bulk for retailers and customers Late hour service after the closure of retailers Go into warehouses and pick out needed items, pays cash at counter Mostly no credits May operate on a national or regional basis or more locally Stock generally a wide range of goods substantial amount of capital to finance stock, warehouses, advertising, overheads etc. Restrict activities to a particular trade or a particular area Conventional retailers buy generally from them specialized on particular trade International exchange of wide range of commodities such as coffee, coca, vegetable oils, rubber etc. Sometimes sold by auction if items are graded or sampled Sometimes brokers and dealers make private arrangements Goods are not passed through the exchange rather sold by description or sample Delivered from the

Advantages

Disadvantages

General wholesalers

Specialist wholesalers/ merchants

London commodity exchange

The London metal exchange

The London corn exchange The Baltic exchange

source to destination Ring trading Members assemble around a drawn ring on the floor, each metal is traded for 5 minutes, dealers call out their bids Clerks keep a record of the deals made Repeated for several times a day More often in the meantime a private deal is made between members Prevailing prices are all known to the members Immediate supply or disposals are common deals Centralized market for all kinds of cereals Chartering or hiring of space or the whole aircraft and ships for trading and transporting of grains, seeds and oils Trade is by grade description only, no samples for dealers to inspect Only approved or specialized persons can deal through agents or brokers Whereby a buyer guards against a future rise in price, or a seller guards against a possible fall in price by agreeing a fixed future price instead of current spot price

Futures/ Hedging