Types of Retailer


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Form of Ownership: – A sole proprietor, partners or a corporation can own a retail business like any other type of business. A majority of retail business in India are sole proprietorship and partnerships.

Independent Retailer: – Generally operates one outlet and offers personalized service, a convenient location and close customer contact. Roughly 98% of all the retail businesses in India are managed and run by independents, including barber shops, drycleaners, furniture stores, bookshops, LPG Gas Agencies and neighborhood stores. This is due to the fact that into retailing is easy and it requires low investment and little technical knowledge. This obviously results in a high degree of competition. Most independent retailers fail because of the ease of entry, poor management skills and inadequate resources.

 Retail Chain: – It involves common ownership of multiple units. In such units, the purchasing and decision making are centralized. Chains often rely on, specialization, standardization and elaborate control- systems. Consequently chains are able to serve a large dispersed target market and maintain a well known company name. Chain stores have been successful, mainly because they have the opportunity to take advantage of “economies of scale” in buying and selling goods. They can maintain their prices, thus increasing their margins, or they can cut prices and attract greater sales volume. Unlike smaller, independent retailers with lesser financial means, they can also take advantage of such tools as computers and information technology. Examples of retail chains in India are Shoppers stop; West side and IOC, convenience stores at select petrol filling stations.

Retail Franchising: –Is a contractual arrangement between a “franchiser” (which may be a manufacturer, wholesaler, or a service sponsor) and a “franchisee” or franchisees, which allows the latter to conduct a certain form of business under an established name and according to a specific set of rules the franchise agreement gives the franchiser much discretion in controlling the operations of small retailers. In exchange for fees, royalties and a share of the profits, the franchiser offers assistance and very often supplies as well classic examples of franchising are; McDonalds, Pizza Hut.


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