Pros and Cons of Small Scale Retailers

Small scale retailers are people who run small shops that deal with miscellaneous goods of daily use. They have fixed shops of their own and stocked goods in small quantities located in market areas or near residential places.

They cover small market areas and they only require few employees for them to run. The revenue from this type of business is usually low as they stock and sell goods in small quantities. They are mostly owned and run by one person hence they only access a limited area.

Pros and Cons of Small Scale Retailers

Pros of Small Scale Retailers

  1. They sell a variety of goods

The small scale retailers sell a variety of goods as they stock a few products. They only serve people who are within the essential goods.

 

  1. Considers individuals’ taste

The small scale retailers cater to everyone’s taste as they ensure that they stock different commodities in small quantities so this makes it possible for them to have a variety of products in small quantities.

  1. Open for long hours during the day

As it is an individual’s business, they open it long hours so that they may serve the people who are within any time they need the goods from them.

  1. Specialists selling online good

Some of these retailers are specialists who sell online goods. This makes them able to deliver the goods to the customers when they need them and have placed an order online.

  1. It needs little capital to start

Small scale retail shops need little capital for the start of the business and this makes it possible for many people to venture into it.

  1. Few legal formalities

With small scale retailers, there are few legal formalities to be followed for them to be established. They only need the license and they start the business.

Cons of Small Scale Retailers

  1. Lack of division of labor

As the business is run and owned by an individual, there will be no one else to share with the duties. The owner will have to do everything by himself or herself.

  1. Unlimited liability

The retailer has to carry the burden of all debts alone and this may sometimes result in the closure of the business.

  1. Difficult to raise capital

It is difficult to raise capital for small scale retailers as it is difficult for a bank to give loans to an individual in order to start a business hence it may be challenging for the owner to start the business.

  1. In case the owner is sick or dies it may close down

Operating small scale businesses can be risky in that the owner may fall sick or die and that may make the business close down hence it is risky to run a small scale retail shop.

  1. Little profit

Small scale businesses get little profit as opposed to large-scale businesses because they sell goods in small quantities and that makes it possible to earn very little profit on the goods they sell.

Summary

Small scale retail shops are good in that they bring essential goods near to the customers but as the retailer has a lot of disadvantages that they face and that is why in small scale retail shops goods are slightly higher for them to be able to meet other expenses incurred on the goods.

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