Itinerant vs. Fixed Shop Retailers: A Comparison

Retail trade is when a retailer purchases small quantities from the wholesaler to sell goods to the final consumers. It works as a link between the wholesalers and the ultimate consumers. Retailers can vary from roadside vendors to departmental stores. We can classify types of retail trade on the basis of ownership, size of business, place of business, etc. On the basis of place of business, there are two types of retail trade:

• Itinerant Retailer

• Fixed shop Retailer

What are Itinerant Retailers?

Itinerant retailers are retailers who do not have a fixed place of business. They keep on moving with their goods and services in search of customers. Some examples of itinerant retailers are street hawkers, pavement vendors, etc.

Features of Itinerant Retailers

Some features of itinerant retailers are listed below:

• They are small traders with limited resources.

• They provide goods to customers at their doorstep.

• They mostly deal in Fast Moving Consumer Goods (FMCG) such as fruits, toiletry goods, etc.

• They can offer lower prices as compared to fixed shops because they do not have any establishment expenses.

Types of Itinerant Retailers

Types of Itinerant Retailers

The types of itinerant retailers are as follows:

• Peddlers and Hawkers: They are the oldest forms of retailers in the market. They are petty or small traders who carry products on a bicycle, a hand cart, or on their heads. They usually deal in non-standardized, low-valued products and are found mostly in busy places like streets, buses, exhibitions, outside schools, etc. This is the most convenient form of retailing as they are available at the customer's doorstep. The only disadvantage is that the quality of the products is not reliable and has no fixed price. For example - Ice cream sellers outside schools, vegetable and fruit sellers in a colony, etc.

• Market Traders: They are small retailers who set up shops at different places on fixed days or dates. They are either dealing in a particular merchandise or in a variety of products. They deal in low-valued, non-standardized goods, and their main target is to cater to low-income group customers. The quality of their products is not reliable, and they offer low prices for the products. For example - the Friday market in Rajouri Garden.

• Street Traders: They are small retailers who sell their products in markets having a floating population. Unlike market traders, they do not change their place of business frequently. They usually set up shops in the marketplace, railway stations, outside office buildings, etc. They deal in products of daily need or immediate consumption. The quality of goods is not reliable, and they are convenient for low-income groups as well as travellers as they are readily available. For example - eatables sold in front of railway stations, newspaper sellers near a bus stand etc.

• Cheap Jacks: They are petty retailers who run an independent shop of temporary nature in a locality. They pay an amount to the fixed shop owner and set up their shop in the place assigned by the fixed shop owner. They deal in consumer items along with the services such as watch repairing, shoes repairing etc. They may change their place based on the potential customers. They provide better quality products at lower prices, but since they may change their pace of business, exchange or return may not be possible.

What are Fixed Shop Retailers?

Fixed-shop retailers are the most common type of retailers in the marketplace. They have permanent establishments in a marketplace or a residential area to sell their merchandise.

Features of Fixed Shop Retailers

The features of fixed-shop retailers are listed below:

• They vary from small to large in size, depending on the nature of the business.

• They deal in both consumer goods and durable goods.

• They have higher credibility in the minds of customers as they provide better services.

• They provide greater consumer satisfaction by providing services such as free delivery, credit facilities, exchange possibilities, etc.

Small Scale Fixed Retailers

Types of Fixed Shop Retailers

The types of Fixed-shop Retailers are as follows:

• General Stores: These are small shops that sell a variety of consumer products. They are usually found in residential areas and local markets. They deal in day-to-day products and are open till late at night which is convenient for the customers. They also offer credit to their regular customers. The general store's success largely depends on the reputation of the owners, its staff, and the services provided. They may not offer branded, good-quality products. For example - Grocery stores, Stationery etc.

• Speciality Shops: These are the shops which deal in a specific line of products. They provide customers with an opportunity to select from a wide variety of brands. They are located in a central place where a large number of customers can be attracted. They may not attract customers looking for a wide variety of products. For example - Shops selling children's garments, school uniforms etc.

• Street Stall Holders: They are small vendors commonly found at street crossings or places where there is heavy traffic. They attract a floating population and mainly deal in goods of cheap variety like cigarettes, toys, soft drinks etc. They offer daily products at low prices due to low overhead costs, but the quality may be compromised. For example - Pan shop near a bus stand, A juice shop near a crossing or outside college, etc.

• Second-hand Goods: They deal in second-hand goods at very low prices, providing an opportunity for people with modest means. The goods are sold at lower prices. They are located near a busy area to attract a large number of customers. They usually cater to lower income groups people at low prices, but they have quality problems. For example, used books, automobiles, books, etc.

Case Study

Ethos Ltd. is an authorised retailer selling several luxury watch brands. Every watch that Ethos sells comes with a brand warranty and also paces its Ethos stamp. Well-trained staff and great-looking boutiques ensure that Ethos make shopping for watches an enjoyable, unforgettable experience. Now Ethos Ltd. with an outlet of watches exclusively for men at Lajpat Nagar, Delhi is planning to open a branch in Rohini, Sector 13 to meet the increasing demand. It operates with the policy of cash sales and is very particular about the timings of the store.

Answer the following queries about Ethos Ltd. based on the information provided:

(i) Identify the type of fixed shop small retailing business of Ethos Ltd.

(ii) Which type of fixed shop large retailing business is Ethos Ltd. planning to engage in?

Ans:

(i) Ethos Ltd. is a specialty shop as instead of selling a variety of products of different types, this store specialises in the sale of a specific line of products. Ethos Ltd. specialises in luxury watch brands which is a sale of a particular line of product as is the characteristic of speciality shops.

(ii) Ethos Ltd. is planning to start a multiple chain store. They are opening shops at new locations and setting up the same line of products, dealing on a cash basis and having fixed time for all the shops. These are all the features of multiple chain stores.

Summary

Itinerant retailers are retailers who do not have a fixed place of business. They are cheap and mostly cater to the low-income group. They can be street hawkers, cheap jacks etc. Fixed-shop retailers are retailers usually found in our neighbourhood. The benefit of fixed-shop retailers is that they provide credit to regular consumers. They mainly consist of general stores, second-hand shops, etc.