The advantages of multiple shops or chain stores are as follows:
1. Economy in buying
Central office or manufacturing company, by purchasing or manufacturing, supplies large quantity of goods to multiple shops. The cost of such goods becomes relatively low. If goods are to be purchased, help of specialist is taken by whose service goods be easily acquired at lower price at proper time.
2. More sales
Multiple shops are operated nearest to the customers for selling goods in decentralized way.This makes sales faster in more volume. Customers also become confident, interested and attracted towards such shops. They feel satisfy with the quality, price and durability of the goods. Customers also believe that goods are found relatively at cheap price in such shops. As a result, sales volume rises high in multiple shops.
3. Elimination of middlemen
In the presence of multiple shops, middlemen or business intermediaries are not needed. Producers directly sell their goods to consumers directly through their multiple shops. As the producers directly send their products to the final consumers, distribution cost is reduced.
4. Economy in operation expense
Multiple shops become able to minimize their operation expense due to large and speedy sales, or cost for sale goes little. They can get benefit of division of labor, minimum storage goes for storage of goods, they need not spend on free services, they need not advertise separately and do not sell on credit. So, operation expense of multiple shops is economical.
5. Division of risk
Risks remains divided in multiple shops. The more number of multiple shops the less is the risk in multiple shops. If any shop gets loss or sales low due to depression, strike or other reasons, it can be compensated from the income of the sales earned by the shops of other places.
6. Advantages to consumers
Producers can have direct contact with consumers. Consumers get standardization quality goods at cheaper price from near by shops. They do not have to feel difficulty to identify such shops or any goods they need.
7. Research facility