explain any three merits of Chain store
Answers
Answer:
The main advantages of chain or multiple stores may be explained as under:
Advantages of Large Scale Production. ...
- Need for Minimum Stock. ...
- Economy in Advertising. ...
- Lower Selling Price. ...
- Ability to Spread Risk. ...
- Speedy Turnover. ...
- No-Risk of Bad Debts. ...
- Efficient Management.
Answer:
1. Operational expenses are comparatively lower: Centralized management, common advertisement, high rate of turnover, elimination of middlemen, cash and carry operations etc., lead to lower overhead expenses.
2, Economies of large scale buying: Since centralized buying is undertaken for all the chains owned and operated under one management, economies of large scale buying are available.
3. Uniform price is maintained: Chain stores are a group of retail units operated by a single management. All stores charge the same price. So, a uniform price can be maintained. Uniformity of price gives customers confidence and avoids scope for unnecessary bargaining.