Functions: In case of multiple shops, the goods are supplied by the producer. Such shops do not buy independently. The money collected through sales is sent to the manufacturer’s head office on a weekly basis. The head of each shop is known as branch manager who is given responsibility regarding the sale of products of a particular shop. All the marketing and selling policies are formulated by the head office, which are to be implemented by the branch managers in their respective shops.
The branch managers send requisitions for stock required by them to the head office from time to time as and when required. Branch managers submit monthly statements to the head office which indicates the stock position, the sales made, and the other expenses incurred during a particular month. Features: Multiple shops concentrate on selling one or a number of similar lines of goods. The quality of the products and price of the products sold by multiple shops remain same in all the branches existing in the country.
In fact, articles are despatched by the producer to different stores with selling price stamped on them. Generally, all the shops have the same type of names, shop fronts, interiors and outward appearances. The retail prices of all products are fixed and there is no scope for bargaining. All sales are usually made strictly on cash basis and no credit is granted to customers. Management and control are always centralised.
The main object of establishing the multiple shops by the producer is to avoid the profit of the middlemen.