Home Trade contd

Commerce SSS1 Second Term

WEEK 1

Home Trade contd

Performance Objectives

The student should be able to:

      1. Classify retail activities into small and large scale.

      2. Explain the organizational set up of each type of retail trade.

Content

Small Scale Retailing

Small scale retailing is retail trading with a small coverage. Little capital is needed in setting up this type of retail trade. Below are different small scale retailing.

Hawking

This is one of the small scale retail trades. In this form of trade, goods are conveyed from one place to another, either on head, by canoes or by charts.

Hawking is the cheapest and most popular in Africa because it requires little capital.

Characteristics of Hawking

1. It is a small scale retail business.

2. Goods such as food and wears are offered for sales.

3. It provides door to door selling.

4. Hawking requires a small amount of capital to be set up.

5. Different types of goods are sold to consumers in a small unit.

6. It involves the movement of goods from one place to another on the head with trays and wheelbarrows.

7. The products are sold at relatively low prices.

8. They do not pay rent.

9. It involves the low cost of advertising.

Advantages of Hawking

1. A small amount of capital is required to set it up.

2. It provides door to door services to consumers.

3. Provides people with the opportunity to be self-employed.

4. Hawking covers more ground thereby increasing sales and profit.

5. Hawking is a form of adverting

6. Products are sold at lower prices.

7. The running cost of the business is low.

Disadvantages of Hawking

1. Hawkers are exposed to road accidents.

2. There are limitations to the quantity that can be carried.

3. It can disturb the flow of traffic.

4. Young hawkers are exposed to bad influences especially females who are exposed to rapists.

5. Hawking can also contribute to littering and refuse problems.

Mobile Shops

Mobile shops are small retail shops that are moved from one place to another in Motor vans, Lorries, wheelbarrows, bicycles, motorbike etc. A wide range of goods are arranged in them and moved from one place to the other. Mobile shops advertise their goods by ringing the bell, playing music etc.

Street or Roadside Trading

Street or Roadside traders are those retail traders that display their wares along the roads, streets, school gates etc.

Features of Street or Roadside Trading

1. The traders have a particular place they stay to sell their wares.

2. They sell a wide range of goods.

3. They stay on busy roads.

4. They display their ware outside.

5. They sale at low prices.

Market Trader or Stall Holder

This is the type of retail trade that takes place in a particular location e.g constructed sheds. They have a specific time for opening and closing.

Features of Market Trader or Stall Holder

1. They have stores in the Market.

2. They have specific for opening and closing.

3. The stores are arranged according to what is been sold.

Unit Stores

These are retail outlets that operate in urban areas and are located rented places or residence of the retailer. The customer can easily access the trader.

Small Stores

This type of retail trade involves the sales of convenience goods in stores that are Iocated in front of residential houses of the retailers.

Large Scale Retailing

Supermarkets

This is a large retailing business unit selling mainly food and household items with self-service facilities. A supermarket may occupy a large surface area of about 200 meters. The large area enables the customers to move freely in order to make a selection of goods needed.

Characteristics of a Supermarket

1. Large storage facilities: a supermarket has large storage facilities to store goods until they are needed.

2.  Provision of basket and trolleys: This is provided in order to make shopping convenient for customers.

3. Operation of the self-service system: Customers can move round about the shop to select what they want to purchase without any assistance

4. Goods are displayed with price tags: All the items on displayed are pre-packed and have price tags affixed on them. There is no opportunity for bargaining

5. Bulky purchase: This is the act of buying goods in large quantities and sell them to customers at a lower price

6. It deals with a variety of goods.

7. They specialize mainly in household goods and food items.

Advantages of Supermarkets

1. Provision of the self-service system.

2. Provision of shopping kits to make shopping convenient for their customers.

3. Encourages the impulse buying this is to encourage the customers and

to catch their attention when goods are displayed on the counter and shelves

4. Offers varieties of goods to customers.

5. Low overhead cost: Only a few people are employed and therefore, the total overhead cost is reduced.

6. Constant availability of goods.

7. Low prices of goods.

8. Goods are displayed with prices.

Disadvantages of Supermarkets

1. No credits facilities are granted to their customers because it may reduce the sales of goods

2. Lack of personal relationship: there is no personal contact between the

customers and the attendant

3. The high rate of pilferage: goods are always stolen because customers are

allowed to move around without being checked.

4. No room for bargaining.

5. Restricted to the high-populated area

6. Inability to bargain.

7. High running cost.

Mail Order Business

This is a type of business whereby buying and selling are done by post. Customers can transact business directly with the manufacturers. They

contact prospective customers by mail, receive their orders by mail and

make their deliveries by mail. Catalogues or price lists are issued and sometimes order forms are printed in newspapers or order journals. Payment is made by either cash with order (CWO), cash on delivery (COD) or by instalments.

Characteristics of Mail Order Business

1. Production of goods according to customers specification

2. Mode of payment is cash on delivery: This means, customers are to pay for goods before the goods are giving to them.

3. Direct contact with the producer: The manufacturer deals directly with the customers thereby by-passing the middlemen.

4. Usage of catalogues

5. The transaction takes place by post

6. Requires intensive advertising

7. Home delivery.

Advantages of Mail Order Business

1. Cost-saving: operating cost is absent such as renting a shop and so on.

2. Few staff are employed since the transaction takes place by post.

3. Catalogues are useful for an advertisement: Advertising is the creation of awareness of making goods produced to the general public

4. Displaying of goods are absent

5. No problems with bad debt

6. Bulk purchases

7. Local and rural supply

8. Provides convenient for customers

Disadvantages of Mail Order Business

1. Absence of personal contact

2. Goods can be lost in transit while the money paid for the goods will not be refunded

3. Late delivery of goods due to transportation problem

4. No opportunity to inspect the goods the customers want to buy

5. Cost of advertising is very high

6. Inefficiency in the postal system and high cost of postage

7. Pictures in the catalogues may be misleading

8. Much time is wasted by waiting for the goods to arrive

Departmental Stores

Departmental stores are usually described as many shops under one roof. The shops deal in a wide range of goods arranged in departments. Each department deals in a line of goods, e.g. furniture, food items, clothing, electrical goods, etc. Examples of departmental stores in Nigeria are A.G. Leventis (Nigeria) Plc, CFAO (Nigeria) Plc, Bhojsons & Company (Nigeria) Plc, and UTC (Nigeria) Plc.

Characteristics of the departmental stores

1. Each store is organized in departments which are under one roof.

2. Each department is controlled by a  manager.

3. Departmental stores are generally situated in city centres.

4. The stores are often large and are beautifully designed with goods displayed to encourage impulse buying.

5. They provide facilities like restaurants and postal services.

6. Besides the sales departments, there are other departments such as the administration and department, stores department from where the sales departments are replenished and the maintenance department. accounts

7. They operate on a self-service system.

Advantages of departmental stores

1. Bulk purchase from manufacturers is possible because of the size of the

shop.

2. Customers can do all their shopping without going from place to place.

3. The provision of other services such as postal services and the restaurant adds to the convenience and comfort of customers.

4. As the departmental managers control the buying of goods, their stock of goods can be suited to the local needs.

Disadvantages of departmental stores

1. With the central location and employment of many people, the running cost is high.

2. As the shops are located only in big cities, customers will travel a long distance to reach the shop or forego their needs.

3. The sales assistants may be indifferent to customers. This does not promote sales.