Business Studies 3 Marks Question

(a) Retailers.
(b) Services to Manufacturers and Wholesalers:
(i) Help in distribution of goods.
(ii) Enabling large scale operations.

(i) General Stores
(b) Specialty Shops
(c) Street Stall Holders

(a) Speciality stores
(b) Secondhand goods shop
(c) Hawkers

(a) Itinerant retailers,
(b) Market Traders
(c) (i) Street Traders
(ii) Cheap Jacks

The Bookshop is a fixed shop small retailer. The category under which The Bookshop should be placed is second-hand goods shop because the shop deals in wed books, generally persons with modest means purchase books from this shop. The books are sold at lower prices.

Pradeep is a small retailer who sells newspapers and magazines near Janpath metro station, where huge floating population gathers. He did not change his place of business so frequently.
State giving reason the type of retailer and its category under which Pradeep should be placed.

(a) Three services rendered by retailer to wholesalers or manufacturers are as follows :

Help in distribution of goods	Provide help in the distribution of their products by making these available to the final consumers, who may be scattered over a large geographic area. They thus provide place utility
Personal selling	By undertaking personal selling efforts, the retailers relieve the producers of this activity and greatly help them in the process of actualising the sale of the products
Enabling largescale operations	Enables them to operate on, at relatively large scale, and thereby fully concentrate on their other activities

(b) Values which are being adhered to are :

1. Women Empowerment: The company chose two wholesale firms (headed by females) whose proposals were very competitive and attractive which helped in the empowerment of women.

2. Social Concern: The wholesaler firm of AC’s hired the services of a (differently able retailer) Hari

(i) Mail order houses are the retail outlets that sell their merchandise through mail. There is generally no direct personal contact between the buyers and the sellers in this type of trading. For obtaining orders, potential customers are approached through advertisements in newspapers or magazines, circulars, catalogues, samples and bills, and price lists sent to them by post. On receiving the orders, the items are carefully scrutinised with respect to the specifications asked for by the buyers and are complied with through the post office. The goods may be sent by Value Payable Post (VPP). Under this arrangement, the goods are sent through post and are delivered to the customers only on making full payment for the same.

(ii) Advantages :
• It can be started with relatively low amount of capital
• Unnecessary middlemen between the buyers and sellers are eliminated.

Disadvantages :
• There is no personal contact between the buyers and the sellers under the system of mail order selling, there are greater possibilities of misunderstanding and mistrust
• Depends heavily on the availability of efficient postal services at a place

(a) A departmental store is a large establishment offering a wide variety of products, classified into well defined departments, aimed at satisfying practically every customer’s need under one roof. It has a number of departments, each one confining its activities to one kind of product

(b) Characteristics of Departmental Stores are as follows :

1. Located at a central place in the heart of a city, which caters to a large number of customers.

2. Offering large variety of goods under one roof

(c)Advantages of Departmental Stores are as follows :
• As located at central places, they attract a large number of customers
• Offering large variety of goods under one roof
• Aims at providing maximum services to the customers
• Organised at a very large scale, the benefits of large scale operations, particularly, in respect of purchase of goods are available to them
• Considerable amount of money on advertising and other promotional activities, which help in boosting their sales

(a) This is a Chain store or Multiple shop. Chain stores are A number of shops with similar appearance are established in localities, spread over different parts of the country. These different shops normally deal in standardised and branded consumer products, which have rapid sales turnover. These shops are run by the same organisation and have identical merchandising strategies, with identical products and displays

(b) Characteristics of Chain Stores are as follows :

• These shops are located in fairly populous localities, where sufficient number of customers can be approached
• Centralised at the head office, from where the goods are despatched to each of these shops
• Shop is under the direct supervision of a Branch Manager, who is held responsible for its day to- day management
• Controlled by the head office, which is concerned with formulating the policies and getting them implemented
• The prices of goods in such shops are fixed and all sales are made on cash basis

Two way purpose is served by wholesalers providing warehousing facilities in the following manner:

1. Wholesalers take delivery of goods when these are produced in factory and Keep them in their godowns/ warehouses which reduces the burden of manufacturers of providing for storage facilities for the finished products.
2. Warehousing by wholesalers relieves the retailers of the work of collecting goods from several producers and keeping big inventory of the same for maintaining adequate stock of varied commodities for the customers.

Hawkers: A hawker moves about in residential localities. He carries his goods in a hand cart or bicycle. He deals in low-priced goods of daily use. For example, combs, toys, soaps, mirrors, bangles, vegetables, fruits, ice-cream, etc.
Peddlers: A peddler also moves from house to house and sells articles of daily use. But he carries his wares on his head or on the back of a mule.
Therefore, the basic difference between the two is that hawker has a cycle or cart to carry his goods while peddlar carries his goods on heads. So we can say that financially, peddler is weaker than hawker.

A retailer is a business enterprise that is engaged in the sale of goods and services directly to the ultimate consumers.It has following features:

1. A retailer is the intermediary between wholesaler and the ultimate consumer. He is the last link in the chain of distribution.
2. A retailer buys goods from wholesalers and sells them in small quantities to ultimate consumers.
3. He maintains personal contact with his customers.
4. Generally, a retailer deals in a wide variety of goods.
5. He performs various marketing functions and displays goods to attract customers
6. A retailer usually buys goods on credit and sells on cash basis.
7. Retail shops are generally situated near to customers.

The following are the main documents used in the internal trade:

1. Invoice: In case of credit purchases, a statement is supplied by the seller of goods in which he gives particulars of goods purchased by buyer such as quantity, quality, rate, total value, sales tax, trade discount, etc. It is also called a Bill or Memo. Buyer gets information about the amount he has to pay to the seller from Invoice only.
2. Performa Invoice: The statement (or forwarding letter) containing the details of goods consigned from consigner to consignee is known as a Performa Invoice. It gives the particulars regarding quantity, quality, price and expenses incurred on the goods consigned. In case of consignment, consignee is an agent of consigner who is supposed to sell goods on behalf of consigners and this statement Performa Invoice is only for his information. It is also known as Interim Invoice.
3. Debit Note: It refers to a letter or note which is sent by the buyer to the seller stating that his (seller's) amount has been debited by the amount mentioned in note on account of goods returned herewith. It states the quantity, rate, value and the reasons for the return of goods.
4. Credit Note: It refers to a letter or note which is sent by the seller to the buyer stating that his account has been credited by the mentioned amount on account of acceptance of his claim about the goods returned by him.
5. Lorry Receipt: It refers to a receipt issued by the transport company for goods accepted by it for sending from one place to another. It is also known as Transport Receipt (TR) and Bilty.
6. Railway Receipt: It refers to a receipt issued by the railways for goods accepted for sending from one station to another.

They are coin operated machines which are used in selling several products such as milk, soft drinks, chocolates, platform tickets etc in many countries. The latest area in which this concept is getting popular is the case of Automated Teller Machines (ATM) in the banking service. They made it possible to withdraw money at any time without visiting any branch of a bank. They can be useful for selling pre-packed brands of low priced product which have high turnover and which are uniform in size and weight. However, the installation cost and expenditure on regular maintenance and repair of these machines are quite high. Moreover, the consumers can neither see the product before buying nor can return the unwanted goods.

Major differences between wholesalers and retailers are as follows:

S. No.	Wholesalers	Retailers
i.	They are connecting links between the manufacturers and the retailers.	They are connecting links between the wholesalers and the customers.
ii.	They purchase goods in large quantities from the manufacturers.	They purchase goods in small quantities from the wholesalers.
iii.	They deal in limited number of products.	They deal in variety of products for meeting the varied needs of consumers.
iv.	They need more capital to start their business.	They can start business with limited capital.
v.	The display of goods and decoration of premises is not necessary for them.	They lay more emphasis on window display and proper decoration of business premises in order to attract the customers.
vi.	Their business operations extend to different cities and places.	They usually localise at a particular place, area or city.
vii.	They do not directly deal with the customers.	They have a direct link with the customers.
viii.	They do not extend free home delivery and after sales services.	They provide free home delivery and after sales services to the consumers.

These retailers do not have the fixed places to carry their trade and generally move from one place to another in order to sell goods. They can be usually seen along the road sides, streets, railway compartments, bus stands, and fairs etc. They usually possess that stock which can be conveniently sold during the day. They need limited funds to carry their business. These types of retailers deal in daily need articles like vegetables, fruits, milk, eggs and fishes etc.
A brief explanation of this type of retailers is given as under:

1. Hawkers and peddlars: These are the petty retailers who carry their products on their heads or on wheeled vehicles from door to door. They usually sell seasonal goods like fruits, vegetables and eatables and also sell certain other goods like pens, toys and utensils, etc.
2. Cheap Jacks: They hire shops in different residential localities wherein they display their products for sale. They do not stick to one place; rather keep moving from one locality to another. They usually deal in household articles.
3. Market Traders: They sell their products at periodical markets on 'market days'. The markets may be weekly or fortnightly. They also sell their wares at different fairs and gatherings.
4. Street Traders: These traders are found on the pavements of crowded streets or markets of the cities. They are also known as "pavement retailers". In big cities like Calcutta, Delhi, Mumbai and Chennai etc., these traders are usually found selling their goods in different markets.

They are coin operated machines which are used in selling several products such as milk, soft drinks, chocolates, platform tickets etc in many countries. The latest area in which this concept is getting popular is the case of Automated Teller Machines (ATM) in the banking service. They made it possible to withdraw money at any time without visiting any branch of a bank. They can be useful for selling pre-packed brands of low priced product which have high turnover and which are uniform in size and weight. However, the installation cost and expenditure on regular maintenance and repair of these machines are quite high. Moreover, the consumers can neither see the product before buying nor can return the unwanted goods.

Manufacturer gets following services from retailer which he will not be able to get if wholesaler is eliminated from the chain.

1. By selling under his own brand name the wholesaler often relieves the manufacturer of the need to advertise his product.
2. The wholesaler removes goods in larger quantities as they are produced, thus clearing the production lines.
3. By warehousing the goods the wholesaler bridges the time gap between production and consumption, leaving the manufacturer free to concentrate on his specialized activities.
4. He eliminates the need for a marketing system with all that involves in terms of warehousing space, distribution network, sales staff, accounting records, and debt collection.
5. By paying promptly the wholesaler reduces the working capital required by the manufacturers.