State the advantages of multiple shops

The advantages of multiple shops are as follows :

  1. Low cost: These shops have low operational cost because of centralized purchasing and promotion of sales.
    Diffusion of risk: The total risk of an organisation is reduced as the losses incurred by one shop are covered by the profits made in the other shop.
  2. Flexibility : A loss making shop can easily be shifted to some other place or can be closed without affecting the profitability of the organisation.
  3. Economies of scale : Centralised manufacturing/ purchase enables the organisation to enjoy the economies of scale.
  4. Transfer of goods: The goods are transferred from chances of dead stock in these stores are reduced the shop where they are not demanded. Thus, the chances of dead stock in these stores are reduced.
    6.Elimination of middlemen : Multiple chain organisations sell the goods directly to the consumer, hence they eliminate the middlemen in the sale of goods and services.