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RETAIL TRADE

Introduction
The word retail come from French word which means to out a big lots into small lost. It describes the most important function of retailer which is buying goods in large quantity from wholesaler and selling them in small quantity to consumers.

Meaning:
Is the process buying goods in large quantity from producers, manufactures or whole seller and selling them in small quantity to final consumers?
OR
It includes all activities which are related with buying goods in large quantities from producer manufacture or whole seller and selling them in small quantities to the final consumers.

A Retailer
Is a person/trader who buys goods in large quantities from whole sellers and selling them in small quantities to find consumers.
Necessary for retailing
Is necessary due to the following condition
(i) Impossibility of consumers to approach different manufacture or producers and whole sellers who are scattered over large area.
(ii) In ability of consumer to buy large stock due to having in a adequate funds.
(iii) Impossibility of consumer to buy large stock and keep them in their houses which may expire or destroyed.
FUNCTIONS OF RETAILER
A retailer performs the following functions: –
1. Market survey / market research
A retailer is required to perform about consumer preference that is what they like and what they don’t like.
2. Buying
After making survey about consumers’ preferences he must buy for them he must be a good buyer who buys goods of a quality and at fairly / cheap price.
3. Transport
A retailer arranges for transfer of goods from supplies ware house to his premises or sometimes he can arrange transport of goods from his shop to his customers place.
4. Storage
The retailer keeps goods for later use or delivery in order to avoid damage, oversupply or scarcity.
5. Breaking (Bulk breaking)
This means buying in large quantities and sell in small quantities.
6. Selling
He sales good to consumer usually in small quantities.
7. Advertising
After storing the goods he is able to require informing the consumer about what p
roducts are available in this shop.
8. Display and advice
He displays his goods in order to give his customer opportunity to select the one most suitable to them.
9. Selling and sales promotion
He is required to sell his goods to his customers together with giving in activity or motivation.
10. Financing
The retailer act finance through providing credit facilities (by allowing credit).
11. Stock control and book keeping
He is expected to keep books of record, regarding to receipt closing balance of stock in terms of quantities, Also he had keep the books of account in order to control the movement or other terms of money.
THE QUALITIES OF GOOD RETAILER
The sources of retailer depend on a number of factors. The most important being person quantities qualities1.He should be pleasant in his dealing his customers
1. He should know how to communication with his customer i.e. use of soft and good language to customer e.g. you are welcome
2. He should be a good buyer by knowing what to buy, how buy, how much buy where to buy and unit price to buy.
3. They should be a good administrator and organizer so as to manage and control subordinates and also to control inflow and out flow of money in the business.
4. He should be able forecast the demands of his customer as regards to quality, quality taste, fashion parkage, change in demand and appropriate price to be charged to his customers.
5. He should be honest to his customer “The get rich quick” must sell him something types of altitude does not pay in the long run. Honest in dialing with customers without cheating is very important propaganda on selling do not pay positively in the long run.
6. He should be cooperative to his customers and pay them promptly. This would on the other hand earn him maximum cash discount.
7. He should be tactful person in his dealings with customers

IMPORTANCE OF RETAIL TRADE IN COMMERCE.
Retail trade is performed by a retailer. The following are the important of retailer to producers, whole sales and to the public or consumers.

IMPORTANCE OF RETAILER TO PRODUCER AND WHOLESALER
1. He acts as specialist in a selling.
2. He finances the wholesaler by buying from his and paying him important.
3. He offer storage facilities by doing so he clears production
4. He passes back the information regarding public demand for different types of goods.
5. The retailers sell in relatively small quantities can keep var red stock
IMPORTANCE OF RETAILERS TO CONSUMERS
(Services provide by a retailer to consumer) Public.
i) The retailer act as the consumers purchasing agent
ii) He supplies the right kind of goods at reason about price
iii) Assure Variety of goods for customers
iv) Offer after sales services
v) Finance the customers by offering credit worthiness to them
SETTING OF BUSINESS IN THE RETAIL TRADE
Factors to be consider before (starting) interring into retail
1. CAPITAL
Is on item of money must be available the amount of capital required also comprises. The following
i) The required building whatever is to be rented or build’
ii) Depends upon furniture and fittings.
iii) The amount of stock needed to start with.
iv) The amount needed to be as articulating capital.
v) The moment needed to remain as a receive.
2. SOURCE OF CAPITAL
The sources of capital are
i) Provision from own saving
ii) By finding a partner.
iii) By borrowing from friends , back and other financial institution
iv) By borrowing back profit cones from his business.
3. LOCATION (POSITION)
You have to select an area that situated to the nature of the business choose of location depends of the following
i) Availability of market
ii) Good communication system
iii) Reliable security banking facilities.
4. PURCHASING OF STOCK
Buying of stock is the essence of the business. Any single mistake in purchasing will destroy the whole business; you need to make a decision in purchasing.
i) The quality to buy
– Good quality and update goods will always attract costumers
ii) The quantity
-Overstocking should avoided because.
a) Fashion may change and goods may depreciate or become absolute.
b) Turn over may be very small
c) Prices may fall
5. SOURCES OF SECURITY
For the retailer there is usually the source of supplies
i) Wholesaler
These are common source of supply for the retailers
ii) Manufacture / producers
Large scale retailers buy from manufactures or producers.
6. ATTRACTING CUSTOMERS
A retailer has a task of attracting them through the following.
i) Personality and creativity of retailer.
ii) By keeping the shop tidy attractive and pleasant to powers. So that they may come again and more.
iii) Offering delivery after sales services.
iv) Insuring free supplies.
v) Offering cash discount to these who pay promptly.
vi) By exhibiting goods in shows and other displays.
7 DELIVERY
How goods are to be brought to your shop. The choice at which (made) of delivery to be used depend on types of goods their involved urgency quantity and also the time of delivery.
FORMS /TYPES OF RETAIL TRADE
Retail trade is classification into main categories normally
i) Small – scale retail operation
ii) Large scale retail operation.
Small scale retail operation is condition by small scale retailers and large – scale retail is conducted by large scale retailers
Forms (types) of retail trade may be authorized in the form at chart as follows
OTHER RETAIL OUTLETS
Other retailer outlets include.
Market stalls
Open market traders
Kiosks
Canteens
Automatic vending machines
1. SMALL SCALE RETAIL OPERATION
The trade is performed by small scale retailer’s characteristics.
i) Small capital
ii) Small volume of business
iii) Small stock at goods
Small –scale retailers on at two types
1. Those with it fixed shops which include.
i) Itinerants ( pedlars and hawkers)
ii) Road side sellers
iii) Mobile shop
2. Those with fixed shop which include
i) Single shop / unit shop
ii) Tied shop
Itinerants traders is (traveling traders)
– These people move from one place to another or from house to house carrying their goods on their bicycle or heads.
– Itinerants include hawkers and pedlars
Hawkers
They carry small case holding items and visit densily populated residential areas visiting, house to house. They sometime use heads to carry their merchandize.
Pedlars
– They use bicycles or motor vans as means of transport.
Advantage of itinerant traders
i) They offer personal services
ii) Bring certain goods to the door steps at rural people.
iii) Convenience that release the customers the walking around
Disadvantage of itinerant traders
– They have no fixed premises
– Do not offer varieties
– Their goods are very expensive
– Sometimes sell goods as they are not interested in creating good will to customers.
2 Road – side sellers
These are trader who sit near bus stands, railway stations and their goods.
Advantages of roads – side sellers
– Provide personal services.
– Require title capital.
– They offer varieties of goods like cigarette, sweet ,water juice.
Disadvantage of road- sellers
– Not enough varieties are offered.
– They do not care very much about the qualities of good.
– Also their goods may be defective.
3. MOBILE SHOPS
There are motor vans organized as a shop in which customers can enter to purchase what they need.
– The mobile shop business differs from itinerant trading only with respect to the means to transport and the volume stock held the itinerant trader carries only part of stock to the potential areas with the whole shop.
– The mobile shops are shifted from place to place depending on previously prepared timetable.
Advantage of mobile shops
i) Provide personal services.
ii) Offer slightly varieties.
Disadvantage of mobile shops
i) Goods are expensive.
ii) Variety is very limited.
iii) Services are offer slow.
4 .Single shops / unit shops
– There are shops owned by one person or by the family manage the business. They are called single shop because the owners do not have other shops.
Advantage of single shops
i) Slow services.
ii) Normally sell at higher prices.
iii) Variety is limited.
iv) They have a little capital.

Disadvantage of single shops
i) Conveniently situated near consumers.
ii) Give personal services.
iii) Can be opened long hours.

5 .Tied shops / tied houses
This is a type single shops that deals with selling the products of one manufacturing only. E.g petrol station that are tied to one of the few oil companies for example B. P oil com, AGIP, CALTEX etc.
Advantage of Tied shops
i) Offer personal service to the customers.
ii) Conveniently situated near customer.
iii) Offer services for long hours.
Disadvantage of Tied shops
i) Limited variety of goods.
OTHER RETAIL OUTLETS
– Other retail outlets include market stall, markets trader , kind automatic vending mechanics.
1. MARKET STALLS
There are particularly found in markets. Constructed to local authorities they usually consist of small one business premises rented out to individual traders by local authorities. Stall can sell almost any product of services. However any one stall usually offer a limited variety of products or services.
2 .OPEN MARKET TRADERS
The name “Open market” refers to the fact that this form business is conducted in an open space rather than in building.
3 .KIOSKS.
Kiosks are small huts which are fixed on a wall of house or just front of house as a small shop.
These types of retailer outlets provide services similar to those offered by stalls and fixed shops.
4. AUTOMATIC VENDING MACHINES
These automatic machine are designed for selling packed goods.They operates when a coin is put inside and a buttons is pressed where desire good are sent out. Automatic vending machine is also used as selling posting stamps, telephone services etc.
Advantages of automatic vending
i) It is not necessary for a seller to be present for transaction to take place.
ii) A traders is able to sell his product any time of the day and day of the week.
iii) It is more accurate.
Disadvantage of automatic vending
i) It can be used only to sell very few items.
ii) It is very expensive method.
iii) Sometime the customers can cheat by using some fake coins.
iv) The customers can have inconveniences if machines are worn out.
Advantage of SMALL SCALE RETAILERS
i) It can satisfy the need and tasks of his customers since he is in opposition to identify them.
ii) The shop or business premises is usually conveniently situated.

iii) He can give personal attention to his customers.
Disadvantage of SMALL – SCALE RETAILERS
i) He faces a greater risk due lack of insurance against uncertainities like fire, thief ,etc
ii) He can not undertake a sustained programme like advertising and other proportional techniques due to limited finds.
iii) He buys his stocks on unfavorable terms as compared to large scale firm. Because of small quantities of goods he buys, he does not qualify for discount.
2 .LARGE – SCALE RETAILERS
These are retail outlets operating on a large scale.
Large scale retailers have the following distinctive feature.
i) A large capital base
ii) They buy a wide variety of stock in large quantities there enjoying economic resulting from discounts.
iii) They usually buy their goods it discount and large scale turnover so they are able to sale their goods reduces price
Large scale retailers include the following
i) Multiple chain store
ii) Department store
iii) Super market
iv) Hyper market
v) Co –operative retail store
1 MULTIPLE SHOPS/ CHAIN STORE
Is a system of branch shops owned and manage by one organization and operating or dealing in similar line products?
Main features of multiple shops
i) They are under one ownership and control
ii) There is uniformly of the premises, external shop front and internal layout.
iii) They sell one type of product or related range of products
iv) Profit and distribution of productions profit are done at the head office.
v) prices are fixed by the central organization.
Advantage of Multiple shops
i) Due to standard premises design they are recognized easily and become popular
ii) Because they in bulk from manufacturing they enjoy discount.
iii) Shortage their one branch can be solved.
iv) Can afford expensive advertising and each branch advertises another.
v) Because selling through numerous by turnover is high.
vi) Stocks once easily replaced from head office
Disadvantage of multiple shops
i) They are normally located urban centers neglecting ruler area
ii) They tend to specialize in one range of product they do not provide variety of goods.
iii) Being large shop are not flexible i.e cannot early change business.
iv) An error in the decision from the head office may affect all branches.
v) Require more capital to start
Disadvantage of Departmental stores
i) They area front in urban centre neglecting rural area
ii) Large capital is required to set is up
iii) They tend to offer delivery services to those who buy in large quantities and this increase over head expose by sharing in the department cannot be solved by transfer of goods from other department since they sell different item.

2 . DEPARTMENTAL STORE
This is collection of shops under one roof (building) selling different types of good manage by one organization.
Each department is controlled by one manage known as department manager.
Department store sells different types of goods and also provide other service like rest rooms, telephone services, bank services, photocopies services e.g. Shopping centre.
JEHOMA DEPARTMENTAL STORES
Advantage of departmental stores
i) They have big sales and big profit.
ii) Reduce the advertising costs because one department advertises for all departments.
iii) Buy sell all kind of goods in one building, these business enable the costumers to obtain all they need and save time.
iv) Wide choice of customer due to variety of goods.
v) They provide all shopping services in one building to customers.
vi) A loss in one department can be covered by a big gain from other departments.
3 SUPERMARKETS (SELF SERVICE SHOP)
This is a type of retail trade which operates under self-service system.
Self service
This is when a customer goes in a shop and picks what he wants, then he goes to the cashier to pay.Among of the best supermarkets here in Dar es Salaam, are Imalaseko supermarkets, Shoprite, Dar es Salaam supermarket,Nakumati supermarket.
Features of supermarkets
i) Offer self services to customers.
ii) Price charged are usually fixed.
iii) Goods of the some type are displayed in such. Way that customer is guided to a particular shelvies that he wishes to buy with title or no guidance from attendants.
Advantage of supermarkets
i) Customers have the freedom to make their choice.
ii) By stocking more items they are able to increase sales.
iii) No credit facilities hence avoiding bad debts.
iv) As customer move around the shelves they tend to buy other goods on top of they wanted. Since the items have their price or labeled it saves time.
Disadvantages of supermarkets
i) It does not allow customers to exercise their bargaining skills.
ii) No physical contact between buyers and sellers, except cashier.
iii) Customers may delay inside as they compare goods.
iv) It requires a large shopping area.
v) Hold of the goods up to the check point may discourage customers.
4. HYPERMARKETS
In terms of operation, hypermarkets are like supermarkets
– Hypermarket is a very large supermarket with not less than 5000 square metres of selling space.
Advantages of Hypermarket
i) Offer easy and convenient packing.
ii) Carries a large variety of merchandize.
iii) Small numbers of workers are require resulting in less operational costs.
iv) Provide credit facilities.
v) Usually open for much long period than ordinary shops.
Disadvantages of Hypermarkets
i) They required large sums of capital of establish.
ii) Much working capital is tied in stock in the slowing items.
iii) Caters mainly for those with cars since they are located far away from the town centres.
iv) Cannot do well where the transport system is undeveloped.
5. CO- OPERATIVE RETAIL SOCIETIES
These are retail outlets owned and managed by a group of members. Members of the Co-operative elect people who manage and run the stores on behalf of the group.Some co-operatives only serve the members only.
Features of Co-operative shops
(i) Open membership.
(ii) The society exist to serve the members.
(iii) Profits are shared on proportional to share bought.
(iv) Democratic control and decisions is undertaken by voting.Each member has one vote.
Advantages of co-operative retail shops
(i) They are organized on the basic democratic principles.
(ii) Minimize prices of goods sold to members.
(iii) Ensure good and genuine supply of goods sold to members.
(iv) Increase the economic well being to members by sharing profits.
(v) Promote social understanding among members.
Disadvantages of co-operative retail societies
(i) They have no society in their operation as many members have to be informed of the activities of the co-operations.
(ii) The longer of having no full commitment by people on every member will dodge responsibilities but cause.
DIFFERENCES THAT EXIST BETWEEN MULTIPLE
SHOPS AN DEPARTMENT STORE
MULTIPLE SHOPS
DEPARTMENT STORE
1. Sells similar line of goods
2. Buying is the task (duty) of head office. work of selling is decentralized.
3. Does not provide after sales services.
4. All buildings (premises) took similar.
5. Shops are located quite distant area e.g one or two shops for every district.

1. Sells different lines of goods from different manufacturers (wide choice of customers).
2. The task of buying and selling is taken in different department manager.
3. Provide after sellers- services.
4. It is not necessary and rare for departmental stores to looks similar.
5. Shops are located under one building or a chain of buildings.
DISADVANTAGES OF DEPARTMENT STORES
1. The cost for establishing and running department store high .
2. Most of department store are located in towns where park facilities inadequate.
3. Not much credit is granted to customers .
4. Do not know their customers well.
5. Sufficient customers can mainly found in big cities where rent is most expensive.
QUIZ
Suppose you are a chair man of Tuendelee society and you have a responsibility of establishing a Tuendelee co-operative unit, what would be major factors to be considered before starting that unit?
Ans.
1. Capital
This is money or other facilities used to start / establish the co-operative society or trade.
2. Adver
tisement
This is enable the chairman to inform people who would like to join.
3. A chairman should be a good leader and organized so as to manage, control subordinates and also control all financial plans in the unit.
4. A chair man should be having a polite language respect and be honest to his members in order to avoid conflicts within a unit.
5. Co-operation in decisions making among the members.

This will help to standees their co-operative unit and also to qualify.




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