Assam Higher Secondary Skill Subject Retail Trade cheat sheet

Retail = sale of goods/services to the final consumer for personal, non-business use; it is the last link in the distribution chain.

A distribution channel runs manufacturer → wholesaler → retailer → consumer; each intermediary removed reduces cost but shifts functions (storage, credit, assortment) to the remaining parties.

Retail formats: kirana/general store, supermarket, hypermarket, convenience store, department store, specialty store, chain store, franchise, cooperative (Kendriya Bhandar), hawker/mandi, and e-tail.

Organised vs unorganised: organised retail operates under a registered entity with salaried staff and formal accounting; unorganised retail is owner-run, family-labour based, and often unregistered.

Functions performed by a retailer: breaking bulk, holding stock, providing assortment, extending credit, offering information and after-sales service, and creating place/time utility.

Place utility = making goods available where the buyer is; time utility = making them available when the buyer wants them (e.g., seasonal stock held in advance).

Value chain support members: distributors, logistics/cold-chain providers, packaging suppliers, financiers, and government bodies (FSSAI, Legal Metrology, GST authorities).

Retail mix (6 Ps) = Product, Price, Place, Promotion, People, Presentation; the mix decisions distinguish one format from another.

In India, FDI in multi-brand retail is restricted while 100% single-brand retail trading and 100% e-commerce marketplace models are permitted with conditions.

Service quality dimensions (RATER): Reliability, Assurance, Tangibles, Empathy, Responsiveness; reliability - doing it right the first time - is the strongest driver of trust.

Customer lifetime value (CLV) ≈ average purchase value × purchase frequency per year × retention years; compare CLV against acquisition and retention cost to judge CRM spend.

CRM records: contact details, purchase history, preferences, complaints, consent status; consent is mandatory before sending promotional messages under Indian telecom/DPDP rules.

Complaint handling sequence: listen without interruption → acknowledge and apologise for the experience → establish facts → offer a specific remedy → confirm resolution → log the case.

Service recovery paradox: a customer whose problem is resolved quickly and fairly can become more loyal than one who never had a problem.

Escalation rule: front-line staff resolve value/authority-limited issues; anything involving refunds above their limit, injury, or legal threat goes to the store manager the same day.

Loyalty programmes: points per rupee, tiered membership, and redemption thresholds; the breakage rate (unredeemed points) is a real cost that must be estimated.

Moments of truth = every touchpoint (entry, shelf, trial, billing queue, exit, return) where the customer forms a judgement about the store.

Measure service with mystery shopping, exit surveys, complaint rate per 1,000 transactions, and first-contact resolution rate.

Grid layout: parallel aisles and shelving - suits supermarkets and pharmacies because it maximises shelf space and speeds planned purchase.

Free-flow layout: irregular fixtures and curves - suits apparel and specialty stores; encourages browsing but lowers stock density per square metre.

Racetrack/loop layout: a main aisle loops past all departments, exposing the shopper to impulse zones; used by hypermarkets and department stores.

Decompression zone = the first 1.5–2 m inside the entrance where shoppers orient themselves; keep it open and place only a seasonal or brand statement there.

High-rent zones: entrance right side (shoppers tend to turn right), end-caps, checkout queue, and eye-level shelf (roughly 120–160 cm); low-rent: top shelf and bottom shelf.

Planogram = a diagram fixing the position, facings, and shelf space of each SKU; compliance is checked by comparing the diagram against the live shelf.

Space productivity = sales per square metre (or per running metre of shelf); use it to decide which category deserves the prime location.

Opening/closing checklist: cash float counted and signed, POS terminals tested, temperature and lighting checked, stock faced, shutters and alarms verified, and keys handed over against signature.

Shrinkage = recorded stock minus physical stock; causes are theft (customer and staff), supplier short-delivery, and paperwork error - each needs a separate control.

Assortment breadth = number of distinct product categories/lines carried; depth = number of variants (size, colour, flavour) within a category.

Sales forecast for a period = (last period sales × trend factor) adjusted for seasonality, promotions, price changes, and new-store or competitor effects.

Open-to-buy (OTB) = planned purchases at retail − (stock on hand + stock already on order); it caps how much a buyer may commit in the remaining period.

Stock-to-sales ratio = average stock at retail ÷ sales for the period; a ratio of 2 means two periods of sales are held as stock.

Weeks of supply = stock on hand ÷ average weekly sales; compare with supplier lead time in weeks to judge reorder timing.

Markdown % = (original price − reduced price) ÷ original price × 100; maintain markdown budget as a percentage of planned sales.

Sell-through % = units sold ÷ units received × 100; low sell-through before season end signals the need for early markdown or transfer.

GMROI (gross margin return on inventory investment) = gross margin ÷ average inventory at cost; it links profitability with the capital locked in stock.

Seasonal planning: build the buy calendar backwards from the selling season, allowing lead time plus a buffer for customs, transport, and quality rejection.

Buyer's five rights: right merchandise, right quantity, right place, right time, right price.

Vendor selection criteria: quality consistency, delivery reliability, price and payment terms, minimum order quantity, return/replacement policy, and compliance documents (GSTIN, licences, BIS/FSSAI where applicable).

Negotiation levers: trade discount, quantity discount, cash discount for early payment, freight paid, markdown support, and free replacement of defective stock.

Cost price build-up = landed cost = invoice price − trade discount + freight + insurance + duties/taxes (non-creditable) + handling; landed cost, not invoice price, drives margin.

Private label vs national brand: private labels give higher margin and exclusivity but need quality control, packaging, and shelf space commitment.

Assortment decision rule: drop an SKU when its contribution to category sales and margin falls below the category average for two consecutive review cycles.

Purchase order must state SKU, quantity, unit cost, delivery date and place, payment terms, quality/return clause, and both parties' GSTIN.

Never buy on verbal commitment; a signed PO or contract protects both sides on price, delivery, and rejection rights.

Range review cadence: core range reviewed annually, fashion/seasonal range reviewed every season, and slow movers reviewed monthly.

Reorder level = (average daily sales × lead time in days) + safety stock; when stock on hand plus on order falls to this level, raise a purchase order.

Safety stock covers demand and lead-time variability; higher service-level targets require larger safety stock.

EOQ = √(2DS ÷ H), where D = annual demand in units, S = ordering cost per order, H = holding cost per unit per year.

FIFO (first in, first out) is mandatory practice for perishables and expiry-dated goods; JIT keeps stock low but depends on reliable suppliers.

Stock turnover ratio = cost of goods sold ÷ average inventory at cost; a rising ratio with stable margins means stock is moving faster.

Perpetual inventory = continuous recording of every receipt and issue; periodic inventory = physical count at fixed intervals, with the difference booked as shrinkage.

ABC analysis: A items ≈ 70–80% of value but few SKUs (tight control), B moderate, C many SKUs with low value (simple control, higher safety stock).

Cycle counting counts a slice of SKUs on a rotating schedule instead of closing the store for a full count; count high-value (A) items most often.

Goods received note (GRN) is raised only after matching quantity and quality against the PO and invoice; three-way match prevents paying for undelivered stock.

Display hierarchy: window/entrance display → feature end-cap → category shelf → checkout impulse; attention falls with distance from the shopper's path.

Rule of thirds and pyramid/step arrangement create visual balance; odd-number groupings (3, 5) look more natural than even numbers.

Colour blocking groups shades in a gradient or contrast; it slows the shopper and lifts dwell time on the fixture.

Price-point merchandising: group goods by price band (e.g., ₹99, ₹199, ₹299) so the customer compares within a band rather than across the whole range.

Signage must state price, unit, and offer accurately - Legal Metrology requires the declared retail price and quantity to be displayed; misleading 'was/now' claims are unfair trade practice.

Sight lines: keep the top of the display below roughly 1.5 m so the shopper can see across the floor; children's ranges go lower, at 60–100 cm.

Cross-merchandising places complementary items together (batteries beside toys) to raise basket size without extra shelf space.

Mannequins and props must be clean, undamaged, and dressed in stock that is actually available for sale in the store.

Change displays on a fixed calendar (festival, season, sale) and record before/after sales for the featured SKUs to judge display effectiveness.

A tax invoice must show supplier name, address and GSTIN, invoice number and date, customer details if registered, HSN/SAC code, description, quantity, taxable value, GST rate and amount split into CGST/SGST or IGST, and total.

CGST + SGST apply to intra-state supply; IGST applies to inter-state supply; the total tax is the same, only the split changes.

Barcode: EAN-13 is the common retail GTIN; the last digit is a check digit computed from the preceding digits, so a scanner reject usually means a damaged or mistyped code.

POS billing sequence: scan/enter item → verify price and MRP → apply authorised discount → compute tax → take payment → print bill → hand over with change and card slip.

Cash handling: count the opening float against a signed sheet, keep large notes in a drop safe, and reconcile the drawer at shift end; variance beyond the allowed limit is reported.

Card/UPI payment: confirm the amount on the terminal before the customer authenticates; a failed transaction must be verified before re-charging to avoid double debit.

Refund and exchange must follow the printed policy; the original bill or a documented exception is required, and the refund is recorded against the original invoice number.

Void and no-sale operations are the most common fraud routes at POS; both need supervisor authorisation and are logged.

Daily sales reconciliation: POS summary = cash collected + card/UPI settlements + credit sales − refunds; any gap against the physical cash count is investigated the same day.

Selling sequence: approach → probe needs → present benefits → handle objections → close → add-on/upsell → follow up.

Open questions widen the need (what, how, when); closed questions confirm (would you like the larger pack?).

Feature–advantage–benefit: a feature is a fact about the product, an advantage is what it does, a benefit is what it means for this customer.

Objection types: price, need, trust, timing, and product fit; price objections are often value objections and are answered with cost-per-use, not discount.

Upsell = a higher-value version of the chosen item; cross-sell = a complementary item; both raise average transaction value (ATV).

ATV = total sales ÷ number of transactions; conversion rate = transactions ÷ footfall; units per transaction = units sold ÷ transactions.

Promotion types: price-off, multi-buy (3 for 2), free sample, coupon, scratch card, bundle, loyalty points, and in-store demonstration.

A promotion must state the exact condition, period, and exclusions; 'while stocks last' does not excuse charging above MRP or refusing a stated offer.

Evaluate a promotion with incremental sales minus the cost of discount, POS material, and staff hours; a promotion that only pulls forward regular sales adds no profit.

Gross profit = net sales − cost of goods sold; gross margin % = gross profit ÷ net sales × 100.

Net profit = gross profit − operating expenses (rent, salaries, power, marketing, depreciation) − interest − tax.

COGS = opening stock + purchases + direct expenses − closing stock.

Markup on cost % = (selling price − cost) ÷ cost × 100; margin on selling price % = (selling price − cost) ÷ selling price × 100; markup is always the larger number for the same item.

Markup % on cost converts to margin % on price as: margin = markup ÷ (100 + markup) × 100.

Break-even sales (in value) = fixed costs ÷ contribution margin ratio, where contribution = sales − variable costs.

Contribution per unit = selling price − variable cost per unit; fixed costs ÷ contribution per unit gives break-even units.

Current ratio = current assets ÷ current liabilities; a retail business with heavy stock needs a ratio comfortably above 1 to meet short-term dues.

Cash vs credit sales must be tracked separately; a sale on credit is revenue but not cash, so a profitable month can still run out of cash.

Business models: marketplace (platform connects sellers and buyers, e.g., inventory-light), inventory-led/e-tailer (owns stock), D2C brand site, quick-commerce dark store, and social commerce.

In a marketplace, the seller of record is responsible for the product, price, and tax invoice; the platform's role in liability and grievance redressal is defined by the Consumer Protection (E-Commerce) Rules.

Conversion funnel: visit → product page view → add to cart → checkout → payment success; drop-off at each stage is measured separately.

Cart abandonment rate = (carts created − orders placed) ÷ carts created × 100; common causes are extra shipping cost, forced account creation, and slow payment.

Key metrics: average order value (AOV), customer acquisition cost (CAC), return rate, and repeat purchase rate; CAC must be recovered within the CLV.

Returns and RTO (return to origin) are a major cost in Indian e-commerce; a clear size guide, accurate images, and pin-code serviceability check reduce them.

Digital payment options: UPI, cards, net banking, wallets, and cash on delivery (COD); COD carries collection and return risk and often a handling fee.

E-commerce legal duties include displaying seller details, country of origin, MRP, and return/refund policy, and obtaining explicit consent before marketing messages.

Dark store = a small warehouse-only fulfilment point serving nearby pin codes for fast delivery; its layout is optimised for picker speed, not shopper experience.

FSSAI licence/registration is mandatory for food businesses; display the licence number, and follow storage temperature and 'best before' rules.

Legal Metrology requires the MRP, net quantity, and manufacturer/packer details on the package; selling above MRP is an offence, and dual MRP on one pack is not permitted.

GST-registered retailers must issue a tax invoice for sales above the prescribed threshold and preserve records for the statutory period.

Consumer Protection Act, 2019: the consumer has rights to safety, information, choice, redressal, and hearing; the retailer must display a grievance redressal mechanism and cannot use unfair or restrictive trade practices.

Shop and Establishment Act (state law) governs opening hours, weekly holiday, working hours, and registers of employees; requirements vary by state.

Fire safety: keep exits unobstructed, extinguishers serviced and accessible, no stock stacked against electrical panels, and staff trained in evacuation.

Food hygiene: separate raw and cooked handling, cold chain at the prescribed chilled temperature, pest control records, and clean staff hands and uniforms.

Personal hygiene for food handlers: clean uniform, covered hair, trimmed nails, no jewellery on hands, and no handling food when unwell.

Ethical practice: no sale of expired or damaged goods, honest weight and price, protection of customer data, and refusal of bribery or counterfeit stock.