SS1 Commerce Lesson Note on Mail Order

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MAIL ORDER

This is a type of business whereby buying and selling is 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 installments.

FEATURES/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. Transaction takes place by post
6. Requires intensive advertising
7. Home delivery.

ADVANTAGES/MERITS 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 transaction takes place by post.
3. Catalogues are useful for advertisement: advertising is the creation of awareness of making goods produced to the general public
4. Displaying of goods are absent
5. No problems of bad debt
6. Bulk purchases
7. Local and rural supply
8. Provides convenient for customers

DISADVANTAGES/DEMERITS 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 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

MODERN TREND IN RETAILING

Modern trend in retailing is the rapid growth in economic and technological development.

SELF-SERVICE: This is a system where the customers to go round the stores to select whatever goods they want to buy from the shelves and pay to the cashier with or without any assistance of the attendants. Appropriate packaging and display enhance self –service.

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