SS1 Commerce Lesson Note on Small-Scale Retailers

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TOPIC: HOME TRADE

CONTENT:   

1. Factors to be considered in setting up a retail trade.
2. Classification of retail trade i. Small Scale retailers ii. large scale retailers
3. Reasons for survival of small-scale retailers

SUB TOPIC 1: FACTORS TO BE CONSIDERED IN SETTING UP A RETAIL TRADE.

1. Capital: This is a very important factor that must be put into consideration before setting up a retail trade. The amount of capital will determine the size of the business.
2. Price policy: The retailer must put into consideration the selling price of the product. The best price policy must be determined.
3. Source of supply: The retailer must determine the source of supply so as to maintain constant supply.
4. Type of goods: He must consider what he wants to sell. He should prepare his mind on the type of goods to be sold.
5. Experience: The retailer must have acquired some skills on the field he wants to operate e.g electronics business, provision etc.
6. Advertising: He must also look at the best medium of advertising his products.
7. Location of the business: The place a business is sited is very important, the retailer have to consider the location where he wants to carry out his business.

SUB TOPIC 2:  CLASSIFICATION OF RETAIL TRADE

Retail activities can be classified into small-scale and large scale as represented in the diagram below                                                           

                                                  Retailers

Small scale                                ⇔                                       Large scale

Hawkers/itinerant trade            ⇔                                         chain stores

Mobile shops                              ⇔                                        Departmental stores

Street traders                                  ⇔                                    supermarkets

Market traders                                  ⇔                             Mail order business

Small Stores (Urban and Rural)    ⇔                                 Discount houses

Tied shops/unit stores                    ⇔                                   Franchisiing

kiosks                                                  ⇔                                  Hypermarkets

                                                              ⇔                                  Variety stores

                                                            ⇔                                  Retail cooperatives

METHODS OF CLASSIFICATION OF RETAIL TRADE

1. By the types of ranges of goods offered for sale
2. By the functions performed
3. By the size based on the number of employees or turnover.
4. By ownership e.g independent, co-operative
5. By location e.g. rural or urban.

SMALL SCALE RETAILING

Small scale retailing is retail trading with small coverage. Little Capital is needed in setting up this type of retail trade.

CHARACTERISTICS OF A SMALL- SCALE RETAILING

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