Features, Advantages of Multiple Shops, Easy Identification and Elimination of Middlemen (For CBSE, ICSE, IAS, NET, NRA 2022)

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In the previous section, we learnt that in a departmental store, the whole business is carried on in one building and the customers are drawn to it. Now we shall read about multiple shops under which customers are approached by big manufacturers, by setting up shops near customers. They sell similar range of commodities at the same price in all their shops. These shops are usually owned and run by big manufacturers/producers. They open a number of branches at different localities in a city or in different cities and towns in a country. Thus, these shops are also called ‘Chain Stores’ .

Features of Multiple Shops

  • Under the same management and ownership these shops are operated at different places near the customers.
  • All shops are decorated in the same manner to facilitate easy recognition by customers.
  • Multiple shops deal in similar types of goods mostly of everyday use e. g. , shoes, textiles, watches, automobile products, etc.
  • The price is uniform in all the shops for similar items. The head office fixes the price. This practice avoids bargaining and cheating.
  • All multiple shops are managed and controlled by the head office.
  • All multiple shops generally sell goods on cash basis.
  • The goods are purchased or produced at a central place and then supplied by the head office to different branches for sale.

Advantages of Multiple Shops

Easy Identification

All multiple shops are often built alike. They have similar shop-front, display and decoration. This helps the customers to recognise the shops easily.

Elimination of Middlemen

Multiple shops are generally owned by big manufacturers. So, the middlemen are eliminated in the distribution process.

Economies of Large-Scale

These shops enjoy the benefits of largescale purchase or production of goods. Also, due to common advertisement these shops are able to save on the cost of advertising.

Low Price

The customers can get the goods at a cheaper rate because of low operating cost and elimination of middlemen in the process of distribution.

No Bad Debts

All sales are strictly made on cash basis. Hence the question of loss due to bad debts does not arise.

Public Confidence

Standard quality and uniform price of the products help in winning the confidence of customers. The customers get the genuine and standard goods directly from the manufacturer. The chances of duplication of goods and cheating do not arise in these shops.

Convenient Location

These shops are usually located in the main markets and in busy shopping centre. So, the customers can buy goods of their choice easily from these shops.

Limitations of Multiple Shops

Limited Choice

These shops deal in limited variety of products. So, the choice of the customer is restricted to the brand of goods available in these shops.

No Credit Facility

Since the sales are made on cash basis the customer cannot avail of credit facilities from these shops.

No Bargaining

The prices of the products are fixed by the head office. Individual shops have no control over it. So, the customer cannot bargain with salesmen while buying the goods.

Lack of Initiative

These shops are generally managed by the branch managers and they follow strictly the instructions of the head office. Hence, they generally do not take initiative and do not have any special interest in satisfying the customers.

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