Advantages of Chain/Multiple Stores

Multiple stores provide various advantages to their customers, which are described below :

1. Economies of scale: Since central procurement has been used, the multiple-shop organisation benefits from economies of scale.

2. Elimination of Middlemen: The multiple-shop organisation can eliminate unnecessary middlemen in the sale of goods and services by selling directly to consumers.

3. No Bad Debts: Even though all sales in these shops are made in cash, there are no losses due to bad debts.

4. Transfer of Goods: Goods that are not in demand in one location may be transferred to another location where they are in demand. This reduces the possibility of dead stock in these stores.

5. Diffusion of Risk: Losses in one shop may be offset by profits in other shops, lowering an organization’s overall risk.

6. Low Cost: Due to centralised purchasing, elimination of middlemen, centralised sales promotion, and increased sales, multiple shops have lower business costs.

7. Flexibility: Under this system, if a shop is not profitable, the management may decide to close it or relocate it without affecting the overall profitability of the organisation.