Internal Trade

Types of Retailing Trade

So when the goods are finally sold to the final consumer for personal use, we call that a retail trade. Now it does not matter if the consumer bought the product from a store or a roadside hawker, it is still a retail trade. So how do we classify the innumerable types of retailers we come across? We can classify them according to their sizes, or ownership modules. One such easy way is to classify them on the basis of whether they are fixed or not. Let us have a look.

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Itinerant Retailers

These are retailers who do not have a fixed decided place of business. Their business is characterized by moving their shops around, sometimes even on a daily basis. Their sale is to the final consumers of the goods, so they are retailers, even if they do not have a standard place of business.

Some features of such itinerant retailers are as follows,

  • The scale of operations is small. Large-scale operations cannot shift their place of business on a regular basis, but itinerant retailers can
  • The capital is also limited in the case of itinerant retailers
  • They usually deal in day to day products and perishable items of daily use like fruits, vegetables, milk, toiletries etc.
  • Such retailers increase the convenience to customers by making products available practically at the doorsteps of the consumer
  • Since they have to shift their place of business with regularity, they keep limited inventory for logistical purposes.

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Types of Itinerant Retailers

1] Peddlers and Hawkers: Hawkers and peddlers are probably the oldest kinds of retailers in the world. They carry their goods around on bicycles, hand carts, carts, in baskets etc. They set up in local markets and street corners etc. So they constantly move around to reach to the maximum number of customers.

Hawkers generally do not sell branded goods, they mostly deal with non-standardized products of daily use. You have come across these hawkers many times, selling everything from toys to vegetables to clothes etc. These hawkers do not have standard prices for their products also, it differs every day according to circumstances and their fancy.

Itinerant Retailers: Hawkers

2] Cheap Jacks: Unlike hawkers, cheap jacks have an independent shop, but the shop is not a permanent one. They change the location of these temporary shops if they find better opportunities elsewhere. But the frequency of changing the place of business is much lower than that of hawkers.

They too sell consumer products and items of daily use. But cheap jacks are always on the look for better business, markets with more potential.

3] Market Traders: As the name suggests these are retailers operating out of a market. These are small retailers that open their shops only on market days. So if the market is open only on Mondays and Wednesdays, they only trade on these days.

Market Traders usually tend to retail one type of products, like garments or crockery or electrical fixtures etc. They do not deal in a variety of products. The main customers of such retail stores tend to be from lower income groups or people buying in bulk (but still for personal use).

4] Street Traders: These are what we also call pavement vendors. They place themselves on the streets strategically near large floating populations, like schools, cinemas, railway stations etc. They sell products of daily use that the customers in that region would require. Like for example outside railway stations, they sell newspapers and food items, outside schools and colleges they sell stationary, notebooks etc.

Fixed Shop Retailers

These are self-explanatory, they operate out of a fixed place of business. They are permanent establishments that do not change their locations very often in search of greener pastures.

Some features of fixed shops are,

  • Fixed shop retailers generally operate on a much bigger scale, although their size of operations will differ according to the type of store
  • They require a sizeable capital infusion for inventory and infrastructure purposes
  • They also provide a large variety and categories of products as a general rule
  • These establishments have more credibility and are trusted more by the consumers and manufacturers/wholesalers as well

Types of Fixed Shop Retailers

1] General Stores: These are the most common stores we find in India. They carry all items of daily use a customer needs from biscuits and grains to toothpaste and shampoos. They are centrally and conveniently located in a local market or a residential area, where they are accessible to the customers.

Sometimes these stores to increase the convenience factor even offer home delivery and credit facilities.

2] Specialty Stores: These are stores that specifically sell only one line of products, like women wear, electronics, cosmetics etc. They specialize in selling only a variety of products of that one category. Like for example Vijay Sales only sells electronics.

Such stores are usually found in urban cities. They place themselves in a central location so they can attract maximum footfalls, like say in a mall for example.

3] Secondhand Goods Store: As the name suggests they sell used goods. These used goods can range from old and rare books to furniture to cars even. They source their products differently than normal retailers, but since the goods are going to final consumers it is still considered a retail trade.

People in low-income groups or with modest means often shop in such stores, looking for a good bargain.

4] Street Stallholders: These retailers operate out of stalls set up on the street, but their establishments are permanent still. They do not shift their stalls on a regular basis. The stalls are often located in central locations with heavy foot traffic.

They cannot hold a lot of inventory since their shops tend to be small. And they too deal in items of daily use like clothes, stationary, cigarette shops etc.

Solved Question for You

Q: Cheap Jacks are fixed retailers because they have a shop or establishment. True or False?

Ans: This statement is False. Cheap Jacks are itinerant retailers. It is true that they have an independent shop, however, such a shop is not permanent. They keep shifting their shops to look for more customers and better markets.

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