Mail Order Firms. Cooperative Retail Societies
Mail order firms sell by using agents who are often housewives. Customers choose goods from catalogues and give their orders to the agent. The agent then sends these orders to the mail-order firm and the goods are either delivered to the agent or straight to the customers' homes. The money earned by agents is called commission.
Mail-order firms sell by placing advertisements in newspapers or by sending pamphlets to peoples's homes. In these cases no agent is involved and the goods are sent straight to the customer.
Customers can pay for mail-order goods by several methods. Cash with order (CWO) where cash, postal order, cheque or credit-card number can be sent with the order. Cash on delivery (COD) where payment is made when the goods are delivered. Credit where the goods are paid for over a number of months.
Customers shop using mail order because it is easy to obtain credit. Goods can be chosen at home when the shops are closed. Those who are disabled or who live far from a town may have difficulty getting to the shops and use mail-order instead. Some goods can only be obtained on mail order.
Sometimes people do not use mail order because prices are often high because of the high costs of postage and packing. It takes time for the goods to arrive. When the goods are delivered they may not be of the quality the customer expects. Advice cannot be obtained as the buyer and seller never meet. It is more difficult to change goods bought on mail order.
Cooperative retail societies are involved in many types of retailing.
They own shops which sell a narrow range of goods such as groceries or shoes, and shops such as variety chain stores and department stores which sell a wider range of goods. Milk and bread deliveries are also provided to homes.
Cooperative retail societies are different from other kinds of retailing for several reasons. Anyone over the age of 16 years can become a member (or shareholder) of a retail society by buying shares for any amount between 1 and 10 000. Members are allowed only one vote each no matter how many shares have been bought. The surplus (or profit) of a society is given back to customers in the form of lower prices or dividend stamps. Dividend stamps can be placed in special books which can be exchanged for cash or goods or added to the shares held by the customer.
Customers shop at cooperative retail societies because the customer knows that he can become a member of the society and can have a say in the way it is run. Some societies offer educational and other benefits to members.
Sometimes people do not shop at cooperative retail societies because prices can be high in some of the smaller societies. They also believe that some cooperative shops are too old-fashioned.
