Meaning & Features of Multiple Shop.
Sometimes producers open large number of shops in different places for sale of their own products directly to the consumers. These shops opened to sell directly own products are known as Multiple Shops. Under this type of trade, a single business owns a larger number of retail shops which are scattered over various localities of a country and all the shops are engaged in teh same line of activities. The head office is situated at a place where goods are produced. The primary objective behind the establishment of multiple shops is to create market for the own products without the help of any middlemen. There are two types of multiple shops like manufacturer’s retail stores and the middlemen multiple shops. The former multiple shops are engaged in both manufacturing and retailing of the products. The later shops do only selling jobs. It purchases from other producers and is engaged in selling through various branches. The best examples of Multiple Shops are Bata Shoe Company, Delhi Cloth Mills and the Khadi Pratisthana. These business houses are established as joint stock companies and are controlled by a Board of Directors through a managing Director or a General Manager. The branches are controlled by the branch managers.
The sale of these business houses are effected on cash basis and cash realized by the branch are banked on the same day on the account of the head office.
The essential features of a multiple shop are as follows:
- The multiple shop type of business specializes in one line of product and as such stocking of wide range of article is restricted.
- All the branches deal with uniform articles.
- The prices of the product is fixed and as such there is no bargaining.
- All the branches are controlled centrally.
- It always emphasizes on “Cash and Carry principle” and as such credit facilities are not allowed.
- The head office makes all sorts of purchases and supply to different branches.
- The type of business is flexible as the opening of branches can be expanded or contracted.