advantages of independent retailer
- more flexibility and control
- easier to manage personal image
- consistency and independence
- strong entrepreneurial leadership
Disadvantages of independent retailers
- lack of bargaining power
- labor intensive operations
- over dependence on owner
what are chain retailers
they operate multiple outlets under common ownership
examples of chain retailers
- macys
- target (using out of the box thinking by selling direct to consumer products as a middle man)
advantages of chain retailers
- bargaining power
- efficiency maintained by computerization and warehouse sharing
- defined management philosophy
disadvantages of chain retailers
- limited flexibility
- higher investment cost
- complex managerial control
- limited independence among personnel
- excessive standardization due to extreme concern for bargaining power
what is retail franchising
a contractual agreement between a franchisor and franchisee
how retail franchising works
the franchisee pays an initial fee and a monthly percentage of gross sales in exchange for exclusive rights to sell goods/ services in an area
examples of retail franchising
- mcdonalds (also purchases land)
- wingstop
- jazzercise
advantages of retail franchising
- low capital required
- acquisition of well known names
- operating / management skills taught
- cooperative marketing possible
- exclusive rights
disadvantages of retail franchising
- franchisors may overstate potential
- over-saturation can occur
- contractual confinement
- royalties are based on sales (not profits)
leased departments
a space/ department in a retail store that is rented to an outside party
example of leased department
gucci in bloomingdales
advantages of leased departments
- provides a one-stop shopping to customers
- lessees handle management
- reduces store costs
- provides a stream of revenue
disadvantages of leased departments
- lessees may negate store image
- procedures may conflict with department store
- problems may be blamed on department store instead of lessee
