Essay on the Advantages of a Departmental Store

2. Economies of large scale buying:

Departmental stores generally purchase in bulk quantities. For that, they receive discounts and commissions. Such stores purchase directly from the manufacturer and hence avoid middlemen and so also their commission. As a result, departmental stores are able to sell products, at prices lesser than other retailers. Thus, economies of large scale buying are transferred to the customers in the form of low prices.

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3. Central location:

A departmental store is generally located in the heart of the city. Hence, many people visit such stores and make their purchases. Gradually, such stores develop a reputation of their own, by selling quality goods at centrally located areas and busy centres. This attracts a large number of customers.

4. Service:

Departmental store also offers a number of facilities and services like free home delivery, credit, telephone orders, liberal exchange, etc. with courtesy and fair treatment. The availability of such services acts as a special attraction to customers.

5. Wide selection:

Departmental store offers a wide range of goods at different price levels. They also keep a variety of designs, colours, styles, etc. It enables the customers to make a better selection from a wide variety.

6. Higher efficiency:

Departmental store is usually a large business unit. Thus, it is possible for them to employ highly skilled and professional staff. As a result, such stores can achieve a high level of efficiency in its operations as well as earn a handsome profit.

7. Loss in one department is compensated by the other:

Departmental stores usually have several departments. For some reason if one department incurs loss, the profits of other departments can compensate such loss. As a result, the overall profitability of the organisation remains unaffected.

8. Attractive layout:

Department stores are generally centrally located, well decorated and goods are properly arranged. In addition, they offer a number of additional services. As a result, the customers are tempted to purchase something.

9. Large volume of sales:

Due to the wide range of goods offered and various facilities provided by the departmental stores, they are able to make large volume of sales. Large turnover further reduces the selling cost per unit, on the one hand and increases the profit, on the other.

10. Economy in advertising:

Advertisement undertaken by one department becomes the advertisement for the other department too. Customers who enter a departmental store to purchase certain specific goods are also induced to buy some other goods, attractively displayed in the store.

Hence, one department indirectly advertises for the others also. Moreover, a departmental store can advertise on a large scale, thus saving in advertising cost.