In this class, we will discuss small-scale retailing. 

Small Scale Retailing

CONTENT

1. Itinerant trading

2. Other types of small-scale retailing

3. Reasons for the existence of many small-scale retail businesses in Nigeria

4. Problems encountered by small-scale retailers

There are several types of size of retail outlets, which for easy analysis can be grouped into two, namely: Small-scale and Large-scale retailing

Types of small-scale retailing

1. Itinerant traders:
The common feature of itinerant traders is that they move from place to place to sell, thereby making goods handy for customers i.e. goods are brought to the consumer’s doors. Examples of itinerant traders are hawkers, peddlers, gipsies, etc

Features of hawking/ itinerant trading

1. Hawking is a form of small-scale retail business.

2. It provides door-to-door selling.

3. Hawking requires a small capital outlay to set up.

4. It involves the movement of goods from one place to another on the head by carts, by canoe, wheelbarrows, etc.

5. Hawkers do not pay rent

6. The goods are advertised to customers through shouting the wares, bells, horns, trumpets or loudspeakers

Advantages of hawking

1. It requires a small amount of capital for its operation.

2. It provides door-to-door selling.

3. It is easy to start.

4. Hawking is a form of advertising.

5. Little or no running expenses are incurred by its operators i.e. no rent, wages, etc are paid.

6.. Its operations are flexible.

7. The goods are sold at cheap prices to customers.

8.Hawking provides employment opportunities to many who would otherwise have been unemployed.

Disadvantages of hawking

1. Hawkers are exposed to the dangers of road mishaps or accidents.

2. Hawking disturbs the flow of traffic, i.e. it causes traffic hold-ups in urban cities, e.g. Lagos.

3. Hawking deprives some children of their education.

4. Child abuse or child Labour is encouraged by hawking.

5. Hawking contributes to the littering of streets by generating refuse that is dropped on the roads.

6 Food items are exposed to health hazards e.g., dust, germs, and unsanitary handling by hawkers.

7. Young hawkers are exposed to bad influences e.g., drugs, armed robbery, and crime by social miscreants.

8. Hawking is stressful: hawkers are exposed to bad weather conditions like cold, intense heat etc.

9. Hawking is an important avenue for the sale of fake or substandard goods.

10. The government is deprived of revenue as most hawkers do not pay taxes or rates to the local government.

11. Young girls engaged in hawking could be assaulted sexually, leading to early pregnancies.

Evaluation

1. State five advantages of hawking.

2. State four disadvantages of small-scale retail trade.

3. Explain five ways in which the activities of hawkers constitute a disadvantage to the economy.

Other types of small-scale retailing

Street retailing or roadside traders:

These are traders who display their wares along the streets, roads or outside the gates of schools, companies or offices in town and cities.
Market traders or stallholders:

These are traders found in established markets and who operate by arranging or displaying their wares (goods) on tables, sheds or stalls. They are traders who do not operate from fixed shops.

Kiosks:
These are retail outlets that offer a very limited range of consumer items, e.g., cigarettes, sweets, provisions, newspapers and magazines, stationery, phone cards/calling services, etc. They are usually sited at places where customers frequently pass such as junctions, motor parks etc

Small store or single shops:
These are small stores found in front of residential houses or at shopping complexes. They are conveniently located for customers and are found in both urban and rural areas.

Tied shops:
These are shops that confine whatever they sell to a single commodity which their producers supply directly to them. The shop owners are supported with finance, equipment/machinery for thesale of such products by the manufacturer. Tied shops sell a single product like ice cream, soft drinks, petroleum products, beer etc.

Mobile shops:
These are motor vans or Lorries used as shops with goods well arranged. They build up regular customers and are very convenient for consumers in remote areas. They advertise by music, microphone announcement, public address system, jingles, etc.

Reasons for the existence of many small-scale retail businesses in Nigeria/West Africa

1. Lack of sufficient capital that could be used to established large retail business

2. Low savings as a result of low per capita income

3. The high rate of unemployment and the difficulty in getting white-collar jobs

4. Absence of developed markets

5. Small scale business requires small capital which is within the reach of many people.

6. Small-scale retailing is attractive as it involves low running expenses.

7. Its operations are flexible: The owner can combine it with other forms of occupation, and it can easily be adapted to changing conditions where necessary.

Problems encountered by small scale retailers

1. Competition from big businesses e.g. price competition

2. Insufficient capital for investment and expansion of business

3. Inability to secure an ideal location because of congestion, especially in urban areas

4. Bad debts, i.e., the inability of the business to collect debts from its debtors.

5. Unlimited liability: Small-scale businesses are usually in the form of sole proprietorship or partnership.

6.Disturbance from government agencies like urban planning, revenue officials, environmental protection agencies, etc.

Evaluation

1. Differentiate between a kiosk and a tied shop

2. What is the similarity between a mobile shop and hawking?

3. Why are there many small-scale retail traders in Nigeria?

General evaluation

1. Explain five activities involved in Commerce

2. State three uses of capital as a factor of production

3. State four uses of land as a factor of production

4. List six functions of an entrepreneur

5. Explain five advantages of small-scale retailing

Theory

1. Who are itinerant traders?

2. State four features of Hawking.

3. State three reasons for the survival of small-scale retailers in Nigeria

Next class, we will discuss Large Scale Retailing. Send your questions in the comment section below and we will respond.