Retail trade involves the buying of goods and selling them to the final consumer. A retailer is the trader who buys goods with a view of selling them to the final consumer.
Classification of Retail Trader
Retailers are classified/categorized according to the amount of capital they need to start and operate their businesses and their sales volume. Thus retailers can be classified as;
1. Small-scale Retail businesses/small scale Retailers
These are retailers whose capital requirement is low and their sales volume also low. They form the majority of retail traders and all found in all parts of the country.
Small scale businesses are easy to start and in most cases they are operated as one-man’s business.
A small scale trader serves the needs of people in the immediate neighborhood and deal mainly in fast moving goods such as foodstuffs, detergents, kerosene etc.
Categories and Types of small scale
These are two main categories of small scale traders as shown below;
a) Small scale Traders without shops
a) Small scale Retailers without shops
i. Itinerant Traders
These are retailers who move from place to place selling their goods either on foot, by bicycles or motor cycles
They move from town to town, door to door and from village to village selling their goods. Their goods may include clothes, utensils and foodstuffs. Customers can buy goods without having to travel to look for them
Examples of itinerant traders are hawkers and peddlers (Hawkers move around on bicycles, handcarts or motorcycles while peddlers walk around)
The itinerant traders require a license from the local authorities in order to sell their goods.
Characteristics of itinerant Traders
These are traders who sell their goods at places where other people pass by and at busy places such as along busy roads, bus stages, road junctions and entrances to public buildings.
They place their goods on trays, cardboards, empty sacks and mails
They sell items such as fruits, utensils, sweets, clothing and some hardware.
iii. Open-air market Traders.
Open air markets are places set aside by the government through the local authorities where people meet to buy and sell goods. Traders selling similar commodities are allocated a special area. Such markets are open on particular days of the week.
The variety of goods sold here is wide and include agricultural produce, clothing, household items, animals, foodstuffs and even furniture.
The traders move from one market to another depending on the various market days.
Advantages of small-scale retailers without shops
b) Small scale Retailers with shops
These are small scale retailers with permanent locations to operate from. They include;
These are small shops or structures found mostly in residential areas, busy streets, highly populated areas or inside building where people pass by or work
They deal in fast-moving items and groceries such as; sodas, cakes, sweets, cigarettes, and newspapers etc. some kiosks also sell food.
ii. Market stalls
These are permanent stands found in market places, especially those operated by the various local authorities
They are of different designs depending on the goods they sell or services they offer.
They are rented or leased by individuals from local authorities
They deal in fast moving household goods though some may specialize in other products such as clothing and shoes.
Examples are stalls at Muthurwa markets, Kariokor, and most municipal markets
Advantages of kiosks and market stalls
Disadvantages of kiosks and market stalls
iii. Single shops (unit shops)
Advantages of single shops
Disadvantages of single shops
iv. Tied shops
These are shops that mainly sell the products of one particular manufacture or are owned by a specific supplier of certain goods. The shops are owned or controlled by the manufacturer, and are thus tied to the manufacture.
The manufacture/supplier designs the organization of the shop and its appearance e.g. painting hence they look alike. The supply closely supervises the shops.
Examples of tide shops include; Bata shops which sell shoes made by Bata Company, petrol station like National, Kobil, and total etc.
Advantages of Tied shops
Disadvantages of Tied shops
Differences/Distinction between a tied shop and single shop.
These are retail shops found in institutions such as schools, colleges, hospitals and army barracks.
Advantages of canteens
vi. Automatic vending machines;
these are coin or card operated machines used to sell commodities like drinks, stamps, and snacks etc. Examples are coffee shops, ATM’s etc.
Advantages of vending machines
Disadvantages of vending machines
vii. Mobile shops
Advantages of small scale Retailers
Disadvantages of small scale retailers
LARGE SCALE RETAILERS
Large scale retailers have the following features/characteristics;
TYPES OF LARGE SCALE RETAILERS
A supermarket is a large scale self-selection/self-service store that deals mainly with household goods such as utensils, foodstuffs and clothes. It has the following features;
Features of supermarkets
Advantages of supermarkets
Disadvantages of supermarkets
A hypermarket is a large shopping complex/centre comprising a variety of businesses managed by different people all housed in one building
Examples; village market, sarit centre, Tuskeys-Kisumu, Nakumatt mega city-Kisumu e.t.c
Features/Characteristics of Hypermarkets
Advantages of Hypermarkets
Disadvantages of Hypermarkets
c. Chain stores (Multiple shops);
Are large scale businesses with separate branches which are managed and organized centrally. The branch managers are accountable to the head office. Examples; African Retail Traders (ART), White Rose dry cleaners, Nakumatt, Tuskys, Uchumi e.t.c
Characteristics/features of chain stores
Advantages of chain stores/multiple shops
Disadvantages of chain stores/multiple shops
d) Departmental stores
This is a group of single shops operating under one roof with a centralized management
Each shop/department specializes in a particular line of products and is headed by its own department manager.
Characteristics of departmental stores
Advantages of departmental stores
Disadvantages of Departmental stores
e. Mail order stores
This is a type of retail business where business is carried out through the post office, telephone or email
Advantages of Mail order stores
Disadvantages of Mail order stores
FUNCTIONS OF RETAILERS
These can be discussed as services rendered to consumers, wholesalers and producers
Services Rendered to consumers
Business Studies Notes Form 1 - 4
Atika School Team