Retail Trade

The commercial activity of selling items to the final consumer, or ultimate customer, is known as retail trade. It serves as a link between wholesalers or producers and the product’s end users. Typically, merchants offer things to individuals in modest amounts for personal use alone, not for resale or company. Read on to know retail trade meaning and types of retail trade.

What is Retail Trade?

Retail is the final step in the distribution. The retailer will purchase the items in bulk (large quantities) at a discounted price from the wholesaler or, in certain cases, straight from the producer. The company then offers the items to the ultimate consumers in tiny units or quantities at retail prices, profiting in the process.

Now you know about what is retail trade, let’s get into the importance and types of retail trade. 

Classification

Purchasing items from wholesalers/manufacturers and reselling them to ultimate customers for a profit is known as retail business/trade. To earn a profit, retail firms typically acquire large quantities at a lower price and then offer them to clients at a higher price. In general, retail dealers are divided into two groups:

Traders on the Move

In this scenario, the selling pitch isn’t set in stone. Itinerant traders offer their wares in a variety of locations. Vegetable sellers, weekly markets, peddlers, and hawkers, for example. 

Traders typically approach consumers and make transactions in this situation. These vendors frequently sell low-cost items and items that are used on a regular basis, such as vegetables. These dealers are unable to set a fixed price for a commodity and will sell the same product at various rates in different locations. For example, vegetable merchants, selling door to door, will charge higher rates than market vendors. Typically, they are low-cost, easily digestible goods.

Traders in Fixed Shops

Shops are set up in specific locations to conduct goods and product trading. Shops are typically located near residential areas or in markets to attract clients. These types of retail traders also have the advantage of offering consumer pleasure through a variety of services such as warranties, discounts, and so on. 

Examples of such trade locations are grocery stores, clothes merchants, department stores, and supermarkets. This is the most popular kind of retail business, in which merchants set up shop in a marketplace or near residential neighbourhoods. Consumers may approach these retail dealers, often known as stores, and acquire the things they require.

Importance of Goods Distribution for Manufacturers/Wholesalers

• Distribution

Manufacturers do not have to worry about distributing their products within the country. They can establish plants in a certain location, and retail dealers and wholesalers will handle the sale of their products to the ultimate customer.

• Selling to Individuals

Some items necessitate personal sales to clients. Customers, for example, require assistance with clothes. As a result, retail dealers provide their knowledge on how to market items to clients.

• Providing a Platform for Large-Scale Operations

Retail traders fill a need in the market by acting as a go-between between manufacturers and their clients, allowing them to create vast quantities of goods.

• Information and Feedback from the Market

The function of retail dealers in the feedback system is equally significant. The customer’s first point of contact is generally a retail merchant. As a result, any flaw or improvement in the product may be reported to the makers by the retail merchants.

• Promoting Your Business 

Sellers may also assist in the promotion of any goods. For manufacturers, how they organise their items in their display is critical. Because of this, product placement is given top priority in any supermarket as part of their promotional activities for a product.

Retail Trade Types

The retailing industry may be divided into three categories based on its size: small, medium, and giant. It might be a single proprietorship, partnership, cooperative society, or joint-stock company, depending on the ownership structure. However, the most frequent way of distinguishing retailing businesses is whether or not they have a fixed location.

There are two types of retail trade:

• Itinerant Retailing

• Fixed shop Retailing

• Itinerant Retailing

Itinerant retailing is a sort of small-scale retailing in which merchants wander about and offer a range of goods to customers directly. They don’t have a permanent shop where they may sell their wares. You must have seen them selling peanuts, bangles, toys, and other items on buses and trains; selling fruits and vegetables in your neighbourhood using a cart; selling ice cream, namkeens, and other items on a bike; selling rice, clay pots, or even carpets using a cart, and so on. You may also find them on the sidewalks in your neighbourhood.

• Fixed Shop Retailers

Retailers sell goods and services from a fixed location called a store. They are not required to relocate from one location to another in order to service their consumers. These stores are typically found near market locations, business areas, or residential areas.

These stores usually sell a restricted number of items. Fixed store retailing may be categorised into the following categories based on the number of transactions or the scale of their operation:

• Retailing on a small scale in a permanent location

• Fixed-store retailing on a large scale

Conclusion

There are many different types of retail trading. Items are not required to be sold in a store; retail commerce can also take place over the phone, over the mail, or through door-to-door sales. As a result, the point of sale might be anything from a store to a supermarket to the customer’s home or even a vending machine. However, one thing that all of the aforementioned examples have in common is that the buyer of the items is the end customer. It will be retail commerce as far as this is true.