Types of Small Scale Retail Trade

Q: What are Types of Small Scale Retail Trade?

See the detailed explanation in this article about types of small scale retail trade.

What are Types of Small Scale Retail Trade?

Types of small scale retail trade are different methods small retailers use to sell goods directly to final consumers. These include hawking, street trading, market stalls, small stores, and mobile shops – all requiring little capital to start.

Quick Summary

Five main types exist: hawking, street retailing, market stalls, small stores, and mobile shops
Each type suits different locations and customer needs in Nigeria
All require low capital compared to large scale retail outlets
Most common in Nigerian cities, towns, and rural areas
WAEC frequently asks for distinctions between these types

The Five Types of Small Scale Retail Trade

1. Hawking

Hawking means moving from place to place to sell goods. The trader carries items or uses a tray, basket, or wheelbarrow. You see hawkers in Nigerian traffic selling water, snacks, phone accessories, and newspapers.

Common items hawked: Pure water sachets, gala sausage rolls, plantain chips, newspapers, phone chargers, fruits, vegetables.

Where you find them: Traffic jams on Lagos-Ibadan expressway, motor parks in Kano, residential streets in Abuja, outside schools and offices.

Capital needed: As low as ₦5,000 to ₦50,000 to start. A tray of pure water costs about ₦1,200 and sells for ₦1,500-₦1,800.

Advantages: Very low capital, no shop rent, can move to where customers are, flexible working hours.

Disadvantages: Faces weather problems (rain, sun), LASTMA and municipal officers may chase them away, limited variety of goods, customers may not trust quality.

2. Street Retailing

Street retailers sell from fixed spots on roadsides or pavements. Unlike hawkers, they stay in one location. They may use tables, mats, or simple wooden structures.

Common items sold: Newspapers, magazines, roasted corn and pear, suya, fried yam, fruits, second-hand books, clothes.

Where you find them: Along Broad Street in Lagos, beside University of Ibadan main gate, near motor parks, outside markets in Onitsha.

Capital needed: ₦20,000 to ₦100,000. Need money for goods, table or mat, and sometimes daily fees to local government officials.

Advantages: Lower rent than shops, customers know where to find them, can serve workers and passersby, easy to start.

Disadvantages: Risk of eviction by government, exposure to weather, limited storage space, security concerns at night.

3. Market Place Retailing

Market place retailers operate from stalls or lock-up shops inside organized markets. Examples include Balogun Market (Lagos), Ariaria Market (Aba), Kurmi Market (Kano).

Common items sold: Foodstuffs (rice, beans, garri), clothing, fabrics, shoes, cosmetics, household items, electronics.

Market types: Daily markets (open every day), periodic markets (once or twice weekly like Eke, Afor, Nkwo days in Igbo areas), night markets.

Capital needed: ₦100,000 to ₦500,000 depending on market location and goods. Popular markets like Computer Village need more capital.

Advantages: Regular customers visit markets, variety of goods in one place, can build loyal customer base, security is better than streets.

Disadvantages: Pay daily or monthly fees to market associations, competition from many similar traders, market can get crowded, fire outbreaks destroy goods.

4. Small Stores/Neighborhood Shops

Small stores are permanent shops in residential areas. Nigerians call them “provision stores” or “mama put” shops. They sell everyday items people need.

Common items sold: Bread, milk, beverages, toiletries, cooking ingredients, soft drinks, recharge cards, sweets.

Where you find them: Inside estates, along streets in every neighborhood, near schools, residential areas in cities and villages.

Capital needed: ₦200,000 to ₦1,000,000. Need money for rent, shelves, stock, and working capital.

Advantages: Convenient for customers (close to home), can offer credit to trusted customers, steady income, can operate morning to night.

Disadvantages: Pay shop rent, need more capital than hawking, customers expect credit facilities, theft by employees or customers.

5. Mobile Shops

Mobile shops are vehicles converted into selling points. The trader moves the vehicle to different locations and sells from it. Common in semi-urban and rural areas.

Common items sold: Bread (in vans marked “Agege Bread”), frozen foods, pharmaceuticals, groceries, farm inputs.

Where you find them: Rural villages without markets, construction sites, industrial areas, residential estates, farming communities.

Capital needed: ₦500,000 to ₦2,000,000. Need vehicle (van or truck), goods, fuel, vehicle maintenance money.

Advantages: Reach customers in remote areas, carry more goods than hawkers, protected from weather, can visit multiple locations daily.

Disadvantages: High initial capital for vehicle, fuel costs increase expenses, vehicle breakdown stops business, need driver’s license and vehicle papers.

Comparison Table of the Five Types

Type	Location	Capital Range	Mobility	Main Challenge
Hawking	Moving (streets, traffic)	₦5,000 – ₦50,000	Highly mobile	Government harassment
Street Retailing	Fixed roadside spot	₦20,000 – ₦100,000	Stationary	Risk of eviction
Market Place	Inside organized markets	₦100,000 – ₦500,000	Stationary	High competition
Small Stores	Residential neighborhoods	₦200,000 – ₦1,000,000	Stationary	Rent and credit issues
Mobile Shops	Various locations (vehicle)	₦500,000 – ₦2,000,000	Highly mobile	Vehicle and fuel costs

Common WAEC Exam Mistakes

WAEC Chief Examiners report that students make these errors:

Confusing hawking with street retailing: Remember – hawkers MOVE around, street retailers stay in ONE spot on the roadside.
Listing without explaining: When the question says “Explain five types,” don’t just write “hawking, street retailing…” You must describe each type with details.
Using only foreign examples: WAEC prefers Nigerian context. Write about Balogun Market, not “shopping malls” which are large scale.
Mixing up with large scale retail: Supermarkets and department stores are LARGE scale, not small scale. Stick to neighborhood shops, not ShopRite.
Not mentioning capital requirements: Small scale means LOW capital. Always emphasize this when explaining why they are common in Nigeria.
Poor distinction between market stalls and small stores: Market stalls are INSIDE markets (Oshodi Market), small stores are in RESIDENTIAL areas (your street corner shop).

Practice Questions

Multiple Choice Questions

1. Which type of small scale retail trade involves moving from place to place to sell goods?
(a) Street retailing
(b) Hawking ✓
(c) Market place retailing
(d) Small stores

2. A trader who sells roasted corn from a fixed spot beside the road practices
(a) Hawking
(b) Mobile shop retailing
(c) Street retailing ✓
(d) Market place retailing

3. Which of these requires the HIGHEST capital to start?
(a) Hawking pure water
(b) Street newspaper stand
(c) Mobile shop ✓
(d) Market stall

4. Balogun Market in Lagos is an example of
(a) Small store retailing
(b) Street retailing
(c) Market place retailing ✓
(d) Hawking

Essay Questions

1. (a) Define small scale retail trade. (2 marks)
(b) Explain FIVE types of small scale retail trade with examples from Nigeria. (10 marks)

Examiner’s Tip: For part (b), pick five types and write 4-5 sentences about each. Include where you find them in Nigeria and examples of goods sold. Mentioning specific Nigerian markets or locations earns extra marks.

2. (a) State THREE differences between hawking and street retailing. (6 marks)
(b) Give FOUR reasons why small scale retail trade is common in West Africa. (8 marks)

Examiner’s Tip: For part (a), use a table with clear differences. Mobility is the main difference. For part (b), link your answer to Post 1984 about continuous existence of small scale trade – mention low capital, unemployment, small purchasing power of customers.

3. Discuss the advantages and disadvantages of market place retailing in Nigeria. (12 marks)

Examiner’s Tip: Balance your answer – write about 4 advantages and 4 disadvantages. Use real examples like market association fees, fire outbreaks in Onitsha markets, security. Marks are awarded for practical Nigerian examples.

Memory Aid

Remember the five types using: “HSSM-M”

H – Hawking (moving seller)
S – Street retailing (fixed roadside)
S – Stalls in markets (organized markets)
M – Mini stores (neighborhood shops)
M – Mobile shops (vehicles)

Capital Order (Low to High): Think “HSSM-M” = Hawking cheapest, Mobile shops costliest

Movement Test:

CAN MOVE: Hawking and Mobile shops
CANNOT MOVE: Street retailing, Market stalls, Small stores