Multiple Choice Questions-
Q.1. It helps disabled and elderly people.
(c) multiple shop
(d) installment system
Q.2. The aim is to economies by buying in common and to retain their profits by selling in common.
(a) multiple shop
(b) web marketing
(d) consumer?s co-operative store
Q.3. This retail business acts as a universal supplier of a wide variety of products.
(a) Departmental store
(b) Multiple shop
(c) Mail order Business.
Q.4.____ are mobile traders who deal in low priced articles with no fixed place of business.
(a) Street stalls
(c) Itinerant traders
Q.5. ____________ can check the price fluctuations in the market by holding back the goods when prices fall and
releasing the goods when prices raise.
(d) Mercantile agent
Q.6. A warehouse keeper accepts goods for the purpose of ____________
Q.7. When goods are imported for the purpose of export is called as _________
(a) Foreign trade
(c) Home trade
Q.8. The purchase of goods from a foreign country is called ____________
Q.9. The risk of bad debts in this business is eliminated particularly when payment is received through V.P.P.
(b) mail order trading house
(c) Departmental store
(d) co-operative store
Q.10. It is a network of a number of branches situated at different localities in the city or in the different parts of the country.
(a) Multiple shop
(b) Consumers? co-operative store
(c) Hire purchase system
(d) Internet marketing
Q.11. Small scale Fixed retailers includes ____________
(c) Cheap Jacks
(d) General stores
Q.12. ____________ are agents who merely bring the buyer and the seller into contact.
(a) Selling agent
(b) Commission agent
Q.13. Wholesaler?s deals in ____________ quantity of goods
Q.14. An agent is appointed by the ____________
Q.15. The persons who come in between the primary producer and the final consumer to promote trade is called
1. Differentiate between street trader and street shops
2. What do you mean by a Cheap jack type of retail trade?
3. State any two advantages of supermarkets.
4. Define Internal Trade
5. List the two broad categories of trade.
6. Which shops deal in specific line products?
7. Give two examples of chain stores
8. Mail order Houses provide a lot of convenience to the customers, yet they are not very popular. Why? Give one reason.
9. What are Vending Machines? Which type of goods are suitable for vending machines?
10. Sandeep& Sons, Delhi orders pearl jewellery from Nasir Bros, Hyderabad. They enter into a contract and make certain that the
payment will be made only on receiving the goods at Delhi in their Shop. Identify the term of trade in the above example
1. Distinguish between a wholesaler and retailer. Give only one point of difference
2. Discuss services of retailers to manufacturers and wholesalers.
3. Identify the type of itinerant trader from the following:
a) Traders who open their shop on a fixed day.
b) Petty retailers who have temporary independent shops.
c) Traders commonly found in populated areas.
4. Jyoti has shifted residence to a new settlement colony. There are no retail shops nearby. What difficulties will Jyoti face in the above case?
5. Identify the types of retailers in the following statements:
(a) Rohan displays his goods on bus-stands or pavements.
(b) Mangal sells goods from one street to another, from one locality to another.
(c) Rajkumar sells only school uniforms.
(d) Deepanshu deals only in second-hand books.
6. A manufacturing Co. opens shops at different locations in India. He sells goods on cash only. The shops have identical decorations.
The prices of goods are fixed. In this way they eliminate unnecessary middlemen thus benefiting the consumers.
(a) Identify the type of shop referred to.
(b) Elaborate characteristics of such shops
7. Vishal buys goods in larger quantities and sells them to small businessmen.
(a) Which type of trader is Vishal?
(b) State services to consumers of Retailers.
8. Mention differences between departmental store and multiple shops.
9. Explain the features of Departmental store
10. Enumerate the limitation of Multiple shops.
1. Discuss the features of fixed shop retailers? Explain different types of fixed shop small retailers?
2. Discuss the features of Mail order houses? State their merits and limitations?
3. Uma, a village girl, comes to Delhi to visit her relatives. She goes with her cousin to a shop, which is centrally located. She becomes
astonished by the varieties of goods which are sold here.
(a) Identify this type of shop.
(b) Quoting lines from the above paragraph describe two characteristics of the shop.
(c) Explain advantages of such shops.
4. Nirmala orders a mixer on the basis of an advertisement in a newspaper specifying the features, price, delivery terms. It specified that
the terms of payment will be VPP only.
(i) Identify this type of retail business.
(ii) Explain two advantages and two limitations of them
5. A London based manufacturing co. manufacturing washing machines wish to add 2 new products in India namely AC’s and Refrigerators.
Out of a lot of 10 applicants the co. chose two wholesale firms (headed by females) whose proposals were very competitive and attractive. The
wholesaler firm of AC’s hired the services of a (differently able retailer) Hari at competitive prices to sell AC’s in Delhi, Hari informs his
wholesaler firm's head that the consumers of Delhi wish that their houses are cold when they reach their homes in the scorching heat of Delhi.
(a) Explain three services rendered by retailers to wholesalers or manufacturers.
(b) Identify two values which are being adhered to in the above paragraph
6. Briefly explain the role of Chamber of Commerce and Industry in promoting internal trade?
Case Study Questions-
1. Direction: Read the following text and answer the questions that follow:
Malti was selling vegetables going door to door in the local area in her cart along with her mother. Her father sells consumer items of
daily use outside different temples of that locality at different places on fixed days. She doesn’t like the business of selling vegetables
because of short shelf life of vegetables and very little profit. She told her father to take loan and to open a small shop where all plastic
items of daily use like jugs, baskets, thread-box, containers, etc. can be sold. Due to lack of funds, her father could not take a shop on rent
rather he decided to sell soft-drinks, mouth freshener, beetle leaf etc. on a temporary platform with limited space at one of the crossing.
(i) Identify the type of trade discussed above:
a) Wholesale trade
b) Retail trade
c) Large scale business
d) Online trade
(ii) “...soft-drinks, mouth freshener, beetle leaf, etc. on a temporary platform with limited space at one of the crossing’.
The type of retailer stated here is:
a) Speciality stores
b) Market traders
c) Cheap jacks
d) Street stall holders
(iii) “She told her father to take loan and to construct a small shop where all plastic items of daily use like jugs, baskets,
thread-box, containers can be sold.” Specify the type of retailer indicated here:
a) Single line stores
b) Street stall holders
c) Speciality stores
d) Cheap jacks
(iv) “Malti was selling vegetables going door to door.” What kind of retailer Malti is?
a) Fixed shop
b) Street traders
d) Cheap jacks
2. Read the following text and answer the questions that follow:
Malti often noticed that nuclear families where both husband and wife go to work find it difficult to cook as cleaning and cutting vegetables
took a lot of time, so as an entrepreneur she started gathering information regularly and developed a new product line of selling chopped
vegetables in hygienic packaging under the brand name ‘Sabjiwala’. She started her shop in her home space. In the beginning, she catered to
the orders of customers directly but later on as demand increased, it was difficult for her to manage all the orders from that space. Her friends
advised her to sell the products by opening her chain stores. This will increase her sales turnover and eventually the profits. Following her
friend’s suggestion now she has expanded her business to an extent that from a small shop operating from her home, she has changed it to a
chain store having its 6 branches in the city.
(i) ‘In the beginning, she catered to the orders of customers directly’. Who serves as the last link in the distribution channel?
(ii) Identify which of the following is not an advantage of a chain store?
a) Elimination of middlemen
b) No bad debts
c) High operating cost
d) Diffusion of risk
(iii) ’Chains Stores are the examples of which type of retailers?
a) Fixed shop small retailers
b) Fixed shop large retailers
c) Itinerant retailers
d) Single line stores
(iv) Identify which of the following is not the service of retailers to consumers?
a) New product information
b) After sales service
c) Wide selection
1. Answer: (a) Tele-shopping
2. Answer: (d) consumer?s co-operative store
3. Answer: (a) Departmental store
4. Answer: (c) Itinerant traders
5. Answer: (a) Wholesaler
6. Answer: (d) Storage
7. Answer: (b) Entrepot
8. Answer: (b) Import
9. Answer: (b) mail order trading house
10. Answer: (a) Multiple shop
11. Answer: (d) General stores
12. Answer: (d) Broker
13. Answer: (c) Large
14. Answer: (a) Principal
15. Answer: (b) Middleman
Very Short Answers-
1. Ans: The differences between street trader and street shops are as follows:
2. Ans: Retailers who operate temporary independent stores and continually move their firm from one location to the next, depending
on the area's potential. They sell consumer goods as well as services such as watches, shoes, and bucket repair.
3. Ans: Two advantages of supermarkets are-
(i) Keep a large variety of goods in various patterns, colors, and sizes so that purchasers can make better choices.
(ii) All sales are made in cash, and thus no bad debts exist.
4. Ans: Internal trade refers to the buying and selling of goods and services within a country's borders. Internal Trade has the following characteristics such as:
• Buying and selling takes occur in the home country,
• Payments made or received in the home country
• Only a few formalities for traders to complete.
5. Ans: Internal trade can be divided into two distinct categories:
• Wholesale trade
• Retail trade.
6. Ans: Specialized stores deal in specific line products. Rather than selling a variety of products from multiple categories, these retail shops
focus on selling a certain line of a product. Specialty stores are typically located in a central location where a big number of clients can be drawn,
and they offer a diverse assortment of goods to customers.
7. Ans: Walmart and Body Shop.
8. Ans: Ordering via mail Houses offer a lot of convenience to customers, but they aren't extremely popular because they need a lot of money
to spend on product promotion, moreover due to chances of fraud by traders, the consumers are apprehensive regarding this method.
9. Ans: In many nations, coin-operated vending machines are handy for selling a variety of things such as hot beverages, platform tickets, milk,
soft drinks, chocolates, newspapers, and so on. Vending machines are excellent for selling pre-packaged brands of low-cost products with high
turnover and consistent size and weight. The initial cost of installing a vending machine, as well as the ongoing costs of maintenance and repair,
are, nevertheless, rather significant.
10. Ans: This example is a Cash-On-Delivery (COD) type of trade.
1. Ans: The point of difference between wholesaler and retailer is given below:
2. Ans: The services of retailers to manufacturers and wholesalers are:
• Help in the distribution of goods: Retailers assist in the dissemination of manufacturers products by making them available to end-users
who may be dispersed across a vast geographic area. As a result, they supply place utility.
• Personal selling: Retailers relieve producers of this work and considerably assist them in the process of actualizing product sales by engaging
in personal selling efforts.
• Enabling large-scale operations: Allows them to function at a somewhat large scale, allowing them to focus totally on their other tasks.
• Collecting market information: Retailers are a significant source of market data about customer tastes, interests, and attitudes, which can
help marketers make critical marketing decisions.
• Help in promotion: Manufacturers and distributors must engage in a variety of promotional activities in order to improve product sales. Retailers
take part in these activities and encourage product sales.
3. Ans: (a) Market vendors/traders: Small retailers that open their stores at different locations on specific days or dates are known as
market vendors/traders. They primarily serve people from lower socioeconomic backgrounds and specialize in low-cost consumer goods.
(b) Cheap Jacks: Retailers with temporary independent businesses in a business district are known as cheap jacks. They continually move from
one location to the next, depending on the area's potential. They sell consumer goods as well as services such as a watch, shoe, and bucket repair.
(c) Street Traders: Street traders are the ones who sell consumer items of everyday utility, such as stationery, eatables, readymade clothing,
newspapers, and magazines, and are usually found in places where a large floating population congregate, such as around railway stations and
4. Ans: Jyoti's challenges in the aforesaid circumstances are listed below:
• She will be deprived of the convenience of having items available whenever she needs them.
• She will not be informed about new products that are introduced to the market.
• She will have to hoard goods, sometimes at higher prices in the absence of retail shops.
• She will face inconvenience because she would have to travel a long distance for everything.
• She’ll not be able to take advantage of the credit facility, as generally retail shops provide such facilities.
• She will not have access to a wide range of products under one roof.
• She will not be able to take advantage of after-sale services such as home delivery.
5. Ans: (a) Street traders: They are the retailers who sell consumer items of everyday utility, such as stationery, eatables, readymade clothing,
newspapers, and magazines, and are usually found in places where a large floating population congregate, such as around railway stations and bus stops.
(b) Peddlers and hawkers: They are little producers or petty traders that sell their items at consumers' doorsteps while travelling from place to place
on a bicycle, a hand cart, a cycle-rickshaw, or on their heads. They primarily trade in uncommon and low-value items.
(c) Specialty stores: These retail establishments specialize in the sale of a specific line of a product rather than selling a variety of products of
various categories. Specialty stores are typically located at a central location where a big number of clients can be drawn, and they offer a diverse
assortment of goods to customers.
(d) Second-hand goods stores: These stores sell used or second-hand goods such as books, clothes, autos, furniture, and other household items.
These shops selling used goods may be in the form of a stall with very little structure like a table or a temporary platform to display the books or
they may have reasonably good infrastructure, as in the case of those selling furniture, used cars, scooters, or motorcycles, which are located at
street crossings or in busy streets.
6. Ans: (a) Multiple store or a chain store. There are a lot of chain stores with comparable appearances that have sprouted up in various
locations across the country. These various stores usually sell standardized and branded consumer goods with a high turnover of sales.
These stores are owned by the same company and use the same merchandising tactics, as well as the same products and displays.
(b) The following are the characteristics of chain stores:
• The goods are dispatched to each of these shops from the head office, which is located in a reasonably populous area where a significant number
of clients may be approached.
• The shop is under the direct supervision of a Branch Manager, who is responsible for its day-to-day management.
• The head office is in charge of creating policies and ensuring that they are executed.
• The prices of goods in such shops are fixed, and all sales are conducted in cash.
7. Ans: (a) Vishal works as a wholesaler. A wholesaler buys the product in bulk from the manufacturer and sell it to the retailer/businessman.
Because it acts as an intermediary between manufacturers and retailers, the wholesaler is an important link in the distribution network. The
retail stage of distribution is where items are transmitted from the hands of small businessmen to the hands of consumers.
(b) Services to consumers are as follows:
• Regular availability of products: Maintain consistent availability of numerous products from various manufacturers. This allows buyers
to purchase things as and when they are required.
• New product information: Retailers convey crucial information to customers about the arrival, distinctive characteristics, and other aspects
of new products by arranging for effective product display and through their personal selling efforts.
• Convenience in buying: They offer tiny quantities of goods in close proximity to residential areas and are open for long periods of time. Hence,
the customers appreciate the ease and convenience with which they can purchase things.
• Wide selection: Maintain a diverse inventory of products from various producers. Customers can choose from a large range of products wit
varied styles, colors and designs as a result of this.
• After-sales services: Provides after-sales services such as home delivery, spare part supply, and customer assistance.
• Provide credit facilities: Allow regular customers to apply for credit. As a result, the latter can increase their consumption.
8. Ans: The differences between departmental store and multiple shops are:
9. Ans: The features of a departmental store are:
• Type of Customers: Provide the best possible service to consumers in the upper section of society for whom pricing is secondary.
• Location: In the heart of a city, in a central location that caters to a big number of customers.
• Organization: Due to the vast size of these establishments, they are usually organized as a joint-stock company with a board of directors.
• Services: A departmental store incorporates both retail and warehouse services.
• Purchase and sale mechanism: They have centralized purchasing systems and sales are decentralized in several departments.
10. Ans: Limitations of Multiple shops are:
• Limited choice: They do not sell products made by other companies. As a result, consumers have a limited choice of goods.
• Heavy reliance on top level management: They have to rely on the top level for all advice, which takes away their ability to use their creative
abilities to satisfy customers.
• Lack of effort: Employees' lack of effort can often lead to indifference and a lack of personal touch.
• Losses: Because of enormous stocks sitting unsold at the central depot, management may have to bear significant losses.
1. Ans: Fixed shop retailers are retail stores that have a constant location where they offer their products. As a result, they do not relocate
from one location to another to service their consumers.
• More resources and the ability to operate on a wide scale.
• Deal with a variety of items, including both consumer durables and nondurables.
• High customer trust exists.
There are four types of Fixed Shop Small Retailers:
These stores stock a wide range of products necessary to meet the day-to-day needs of customers in the surrounding areas. They stay open
for long periods of time at convenient times and frequently offer credit to some of their regular customers.
Shops that specialize These retail establishments specialize in the sale of a specific line of a product rather than selling a variety of products
of various categories. Specialty stores are typically located in a central location where a big number of clients can be drawn, and they offer a
diverse assortment of goods to customers.
Street stall holders
Vendors on the street. They cater to roving clients and specialize in low-cost items such as hosiery, toys, cigarettes, soft drinks, and so on.
They receive their goods from both local and wholesale sources. Because a stall's total size is so small, it can only hold a minimal amount of
Second-hand good shops
A store that sells used products These stores sell used or used items such as books, clothing, autos, furniture, and other household items.
Second-hand stores may be set up in the form of a stand with very little structure, a table or a makeshift structure, near street crossings or in
2. Ans: Mail order houses are retail establishments that sell their merchandise via mail. In this sort of trading, there is usually no direct personal
contact between customers and sellers.
• Reaching the potential customers: To obtain orders, potential consumers are contacted by newspaper or magazine advertisements, circulars,
catalogs, samples and bills, and price lists mailed to them.
• Careful Inspection: When the orders are received, they are carefully inspected for compliance with the purchasers' specifications, which are carried
out through the post office.
• Payment options: There may be a variety of payment options available, such as cash payment, demand draft etc.
• Suitability: Only goods that can be:
o graded and standardized,
o easily transported at a low cost,
o have ready market demand,
o available in large quantities throughout the year,
o involve the least amount of market competition,
o described through pictures and other means are suitable for this type of trading.
Merits of Mail order House
• Less finances required: It may be established with a small amount of money.
• Eliminates middlemen: It eliminates the need for unnecessary middlemen between buyers and sellers.
• No bad debts: They do not provide credit to its consumers, thus there is no risk of bad debt.
• Market potential: Big market potential because mail can reach a large number of people across the country.
• Delivery: The goods are delivered at the customer’s place, and hence the customers need not go out to purchase the goods
Limitations of Mail order House
• No personal contact: There is no personal contact between buyers and sellers under the mail order selling system, which increases the
chances of misunderstanding and mistrust
• Investment on product promotion: There is a lot of money spent on product promotion.
• Services: There is no after-sales service, which is crucial for customer satisfaction
• No credit facility: They don't provide credit facilities that discourage the customers from buying goods through this medium.
• Chances of fraud: The chances of fraud exists in such a medium. At times dishonest traders defraud customers by making false claims about
products or failing to honour commitments.
3. Ans: (a) A departmental store is a large store that sells a wide range of products organized into well-defined sections, to meet almost every
customer's demand under one roof. It is divided into several departments, each of which focuses on a single type of product.
(b) The following are the characteristics of departmental stores:
• Central Location: These are located at a central place in the heart of a city which caters to a large number of customers.
Quotation: “She goes with her cousin to a shop, which is centrally located.”
• Wide range of products under one roof: Departmental stores are known for multifarious products and services with varied styles, colours,
designs all available under one roof.
Quotation: “She becomes astonished by the varieties of goods which are sold here.”
(c) The following are some of the benefits of department stores:
• They draw a huge number of clients due to their central location.
• Provides a vast range of items under one roof
• Aims to provide maximum services to clients
• Organized on a very big scale, allowing them to reap the benefits of large-scale operations, notably in terms of purchasing goods
• They spend a lot of money on advertising and other promotional efforts to assist them to increase their sales.
4. Ans: (i) Mail order houses are retail establishments that offer their wares via mail. In this sort of business, there is usually no direct human
contact between the buyers and sellers. Potential consumers are approached for orders through newspaper or magazine advertisements, circulars,
catalogs, samples and bills, and price lists mailed to them. When the orders arrive, they are thoroughly inspected for compliance with the purchasers'
demands, which are then carried out through the post office. The goods could be sent using Value Paid Post (VPP). The goods are shipped via post and
are only delivered to customers on making this agreement.
• Less finances required: It may be established with a small amount of money.
• Eliminates middlemen: It eliminates the need for unnecessary middlemen between buyers and sellers.
• No personal contact: There is no personal contact between buyers and sellers under the mail order selling system, which increases the chances
of misunderstanding and mistrust
• Investment on product promotion: There is a lot of money spent on product promotion.
5. Ans: (a) Three services rendered by retailers to wholesalers or manufacturers are as follows:
• Help in the distribution of goods
Assist in the dissemination of their products by making them available to end-users who may be dispersed across a vast geographic area. As a result,
they supply place usefulness.
• Personal selling
Retailers relieve producers of this work and considerably assist them in the process of actualizing product sales by engaging in personal selling efforts.
• Enabling large scale operations
Allows them to function at a somewhat large scale, allowing them to focus totally on their other tasks.
(b) The following are the values that are upheld:
• Women's Empowerment: The company chose two wholesale enterprises (both led by women) whose proposals were extremely competitive and
appealing, resulting in women's empowerment.
• Social Concern: The AC wholesaler firm enlisted the help of Hari, a (differently able retailer).
6. Ans: Role of Chamber of Commerce in promoting internal trade is as follows:
(a) Interstate movement of goods
The Chambers of Commerce and Industry assist in a variety of operations related to the interstate movement of products, including car
registration, surface transportation policies, and highway and road building.
(b) Octroi and other local levies
These are collected from people entering the state or municipal bonds. The Chambers of Commerce make every effort to ensure that their
regulations do not obstruct smooth transportation or local trade.
(c) Harmonization of sales tax structure and Value Added Tax
The sales tax is a significant source of revenue for the state. For promoting trade balance, a sensible sales tax structure and uniform rates
among states are critical.
(d) Weights and Measures and prevention of duplication brands
Weights and measures laws, as well as brand protection laws, are required to defend the interests of both consumers and traders. These
must be carefully enforced.
(e) Promotion of Agro based products
The chamber of commerce frequently interacts with various agro based associations, consumer cooperatives, farming associations etc.,
and assists them in selling and promoting their products.
(f) Excise duty
The central government's primary source of revenue is the excise tax, which is levied throughout all states. The excise policy has a
significant impact on the pricing system.
(g) Promoting sound infrastructure
The Chambers of Commerce and Industry meet with government departments to discuss infrastructure investments.
(h) Labour legislation
Labor policy that is straightforward and flexible is beneficial to industries that want to maximize productivity and create jobs. The
government and the Chambers of Commerce and Industry are continually focusing on such issues.
Case Study Answers-
(i) b) Retail trade
Solution: Retail trade is the business activity associated with the sale of goods to the final consumer, the ultimate customer. It is the
link between wholesalers or manufacturers and the customers of the product. Typically retailers sell goods in small quantities to consumers
for personal use, not for resale or business use.
(ii) d) Street stall holders
Solution: The markets or the stalls which are practically immobile in the street are known as street stallholders. The merchants place a
small stall or a shop to display their merchandise. They can be erected or taken down simply on wheels. They are commonly seen in fairs
conventions exhibitions etc.
(iii) c) Speciality stores
Solution: A specialty store carries a deep assortment within a narrow line of goods. Furniture stores, florists, sporting-goods stores, and
bookstores are all specialty stores. Stores such as The Athlete's Foot (sports shoes only) and DXL Big + Tall.
(iv) c) Hawkers
Solution: A hawker is a vendor of merchandise that can be easily transported; the term is roughly synonymous with costermonger or
peddler. In most places where the term is used, a hawker sells inexpensive goods, handicrafts, or food items.
(i) b) Retailers
Solution: A retailer is a person or business that you purchase goods from. Retailers typically don't manufacture their own items. They
purchase goods from a manufacturer or a wholesaler and sell these goods to consumers in small quantities.
(ii) c) High operating cost
Solution: Operating expenses (OPEX) are the costs a business incurs to stay up and running. They're also called Selling, General, and
Administrative (SG&A) expenses. Examples of operating expenses are rent, payroll and benefits, inventory, banking fees, marketing ads,
business licenses, and transportation.
(iii) b) Fixed shop large retailers
Solution: Fixed shop retailers are retail shops who maintain permanent establishment to sell their merchandise.
The characteristics of fixed shop retailers are:
They have greater resources and operate at a relatively large scale as compared with the itinerant traders.
(iv) d) Promotion
Solution: In business, promotion is any communication that attempts to influence people to buy products or services. Businesses
generally promote their brand, products, and services by identifying a target audience and finding ways to bring their message to that audience.