SS1 Second Term Commerce Lesson Note – Home Trade II

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WEEK 3

TOPIC: HOME TRADE

CONTENT:

• Reasons why retail business may fail?
• Wholesale trade
• Channel of distribution

SUB-TOPIC 1: WHY RETAIL BUSINESS FAIL?

The following are the reasons why retail business fails in Nigeria

1. Finance: Because of the generally small size, retail businesses do not have ample opportunities to obtain finance. Banks and other financial institutions do not often give loan to small borrowers who are also disadvantaged in accessing the capital market or stock exchange to raise funds.
2. Limited managerial and professional capacity: management and professional services are often limited to whatever the proprietors themselves can provide.
3. Simplistic and non-modern modes of operation: adequate financial and accounting records are sometimes not kept. Also, information technology (computer terminals and networking, electronics trading etc. are not often used. All these may affect the competitiveness of the business.
4. Lack of diversification: because of the small size, retailers may not be able to diversify into many areas of merchandising, which would require much money and management capability. For example, a fall in the demand for a product may easily result in business collapse.

EVALUATION

1. Give three reasons why retail business fail in Nigeria.
2. List and explain types of retail trade.

SUB-TOPIC 2: WHOLESALE TRADE

MEANING OF WHOLE SALE: A wholesaler is a trader who buys goods in bulk or in large quantities from the producer/manufacturer and sells in small quantities to the retailer.

FEATURES OF WHOLESALE TRADE

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