1. Business & Finance

Dealerships

From , former About.com Guide

Licensed Dealership:



Retailers may find the business model of a licensed dealership as a mix of franchise and independent retailer. The licensee has the right (sometimes this is exclusive) to sell a brand of products. Unlike a franchise, the dealer can sell a variety of brands and there generally no fees to the licensor. Dealerships may or may not be identified as an authorized seller or by the company's trademark.

Advantages:

There may be some branding or product name recognition by the customer. The dealership relation is much more flexible than that of a franchise. This may be a good business model for part-time retailers or those just starting in retail.

Disadvantages:

Because of the ease and flexibility of getting started, there can be a lot of competition in a particular area for a certain type of customer. Like the independent retailer, every business decision rests on the owner(s). There is also great deal of risk in this business model.

Support:

Dealerships generally do not receive help in getting their business set up.

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