The cash and carry business model brings together small, medium and large-sized producers, farmers, agricultural cooperatives and manufacturers, with the dispersed community of hotels, restaurants, caterers, traders, retailers and small to medium business enterprises, under one roof.
A cash and carry retailer buys directly from producers and manufacturers and sells to business customers from its no-frill approach wholesale centres.
In this way, cash and carry operators shorten the supply chain and eliminate the high costs associated with a fragmented supply chain (estimated as high as 25 per cent in India). It also cuts costs and wastages by building modern trade infrastructure and implementing modern IT-based systems, which improve efficiency.
By aggregating the demand of small and medium businesses, cash and carry formats are able to buy in bulk quantities for the advantage of its customers. Some of the savings made are passed on to the suppliers, some to the customers, while cash and carry retailers benefit from the supply chain efficiency that they are able to create.
August 13, 2008
Source: Hindu Business Line
