RETAILING

Retail is the sale of goods and services from individuals or

businesses to the end-user. Retailers are part of an integrated

system called the supply chain. A retailer purchases goods or

products in large quantities from manufacturers directly or

through a wholesale, and then sells smaller quantities to the

consumer for a profit. Retailing can be done in either fixed

locations like stores or markets, door-to-door or by delivery.

a) Nature of OwnershipSole ProprietorshipPartnership Joint VentureLimited Liability Company (Private &Public L.L.C).

BASES FOR CLASSIFICATION OF RETAIL UNITS

Sole Proprietorship

(1)Ownership The business is owned by a single individual.

(2) Management and control Being small in size, it is managed by the owner himself. However, he may have some paid workers to assist him. In any Case, the ultimate control rests in his hands.

(3) Finance The necessary capital to run the business is provided by the sole owner. However, he may borrow from other sources such as friends or bank as need arises.

Mutual Contribution. There cannot be a partnership without contribution of money, property or industry (i.e. work or services which may either be personal manual efforts or intellectual) to a common fund.

Division of Profits or Losses. The essence of partnership is that each partner must share in the profits or losses of the venture.

Co-Ownership of Contributed Assets. All assets contributed into the partnership are owned by the partnership. If one partner contributes an asset to the business, all partners jointly own it in a special sense.

Mutual Agency. Any partner can bind the other partners to a contract if he is acting within his express or implied authority.

Partnership

Wider concept compared to collaboration Coming together of 2 companies

◦ In order to promote a new business activity for mutual benefit.

Facilitates inflow of capital and technology ◦ From developed country to developing country.

benefits both partners facilitates industrial growth government approval necessary

Joint Venture

Is a simple way to protect personal assets, unlike a Sole Trader, the Limited Liability Company does not tie your personal assets to the company.

Has an organized management structure comprising the board of directors, secretaries (optional) and shareholders who manage and own the Limited Liability Company respectively, and are a prerequisite for Limited Liability Company formation.

Can accumulate capital quickly by issuing shares upon formation and any time after formation.

Is a flexible structure with the potential for growth, changes can be made after Limited Liability Company registration to the company name, capital and membership.

Characteristics of Limited Liability Company

b) Operational Structure:Independent trader(one retail outlet operation)Multiple or Chain storeFranchisingConsumer co-operativeLeased Department

An independent trader is a person who trades

independently. A person who is not employed by

a company or an organization but trades solely by

him/her self, mostly else known as self-employed.

Trader should trade alone first before he or she decides

to trade with other people. This allows the individual to

develop his own philosophy and his own understanding

about himself and the market.

Independent trader

Multiple chain stores are simply a string or group of retail outlets which

can sell virtually anything from groceries to fast food to dry goods. They

are supplied from large warehouses to reduce overhead and increase the

buying power. Most of these multiple chain stores are public limited

companies which have some degree of centralized control.

a multiple chain store is usually defined as one with ten or more branches.

if it has less than ten branches it is a chain store .there are two types.

1) a specialized multiple chain store concentrating on one main product line.

2) a variety chain store selling a wide variety of goods.

Multiple or Chain store

1. Risk aversion: Successful franchisees are risk averse. They are willing to

take some risk but want that risk to be as small and controlled as possible.

2. Hard-work affinity: Successful franchisees have a

willingness to do whatever it takes to get the job done. This attitude shows in their every action--putting in long hours, handling multiple tasks.

3. Strong people skills: Successful franchisees always have excellent interpersonal skills and can effectively interact with their employees and customers.

Franchising

It is a voluntary association of adult persons registered under the Co-operative Societies Act.

The capital is divided into shares of small value and these shares are subscribed by its members. .

It is controlled in a democratic set up. The accounts of the society are subject to audit by the

registrar of co-operative societies. One member has one vote irrespective of his holding

Characteristics Consumer co-operative

It refers to department in a retail store that are rented to an outside party.

First off - you will pay a rental for the space used - this is normally by the square footage however, some companies want a percentage of the business –

Usually this is done in case of department and

specialty stores and also in discount stores.

Leased Department

Department store Discount store Specialty store Hyper market

c) Length & depth of Merchandise:

1.Large size: A departmental store is a large scale retail organization.2. Wide range of goods: It provides a large variety of merchandise from 'pin to plane'

at one place.3. Specialisation: A departmental store is divided into several departments,

each specializing in one line of goods.4. Attractive appearance: A departmental store is housed in an impressive building

which is fully furnished and well decorated.5. Huge investment: A departmental store requires huge investment of money.

Department store

A discount store is a type of department store, which sells products at prices lower than those asked by traditional retail outlets

Discount stores are not variety stores, which sell goods at a single price-point or multiples thereof (£1, $2, etc.). Discount stores differ from variety stores in that they sell many name-brand products, and because of the wide price range of the items offered.

Characteristics of Discount store

Specialty stores are small stores which specialize in a specific range of merchandise and related items.

1. Large size: A departmental store is a large scale retail organisation.2. Central location: A departmental store is locality in a main market. All the

departments are organised under one roof in a large building.3. Wide range of goods: It provides a large variety of merchandise from 'pin to plane'

at one place.4. Specialisation: A departmental store is divided into several departments,

each specializing in one line of goods.

Characteristics of Specialty store

In commerce, a hypermarket is a superstore

combining a supermarket and a department store. The

result is an expansive retail facility carrying a wide

range of products under one roof, including full

groceries lines and general merchandise. In theory,

hypermarkets allow customers to satisfy all their

routine shopping needs in one trip.

Characteristics of Hyper market

Direct selling Television shopping Vending machine retailing

Non store retailing

Involves personal contact between salesperson/retailer

and customers at any convenient place

It can be door delivery or club

It can also be telephone interactions between retailers

and customers.

Direct selling

It is a retail format in which existing and prospective

customers watch a TV program demonstrating products

and then placing order for the same by telephone ,e-

mail and internet

Mainly depends upon the TV ads

Television shopping

Products or services are placed in a

machine and dispensed to customers when

they deposit cash

These machines offer consumers greater

convenience 24 hours a day.

Vending machine retailing