RETAILER AND RETAIL TRADE — MEANING, CHARACTERISTICS AND FUNCTIONS

Retail trade can be defined as the buying of goods and services from wholesalers (or manufacturers) and selling them directly to the consumer.

It includes all activities directly connected to the sale of goods or services to the ultimate consumer for personal and non–business use.

Individuals who engage in retail trade are called retailers or retail traders.

A retailer usually buys goods in break-bulk from the wholesaler and then sells them in units to the consumer.

Retail trade represents the final stage of distribution where goods produced by the manufacturer are transferred to the final consumer.

Characteristics of a retailer

1. He buys goods in break-bulk: A retailer buys goods in small units from the wholesaler.

He purchases products either directly from the producer or the wholesaler in break-bulk.

2. He sells in units to the consumer: A retailer sells to the customer in smaller units.

This way, they help consumers to purchase goods that they otherwise would not have been able to purchase in bulk.

3. Last intermediary: The retailer is the last intermediary in the chain of production because he sells directly to the consumers, rather than to other intermediaries.

Indeed, In most retail selling transactions, there is direct selling of goods and services to the final consumers.

4. Sells different brands:A retailer typically offers products from various brands.

Retailers don't focus on selling products from a single brand. They sell goods and services of different brands.

This way, they can provide consumers with a variety of goods and services from which to choose.

5. Direct contact with the consumer: A retailer sells products to customers directly. He consequently interacts with the customer directly.

6. Store is close to customers: Because the retailer typically sells to customers directly, his store is usually close to those people.

Functions of the retailer

1. Grants credit: A retailer frequently offers credit options to customers to entice them to make purchases.

Retailers offer credit options to customers so they can purchase now and pay later.

2. He bears risk: This is yet another important function of a retailer.

The retailer bears the risk of default payment by the consumer, which will otherwise have been borne by the producer.

Additionally, he also bears the risk of good spoiling and degradation that may happen from storing items in his store or from natural disasters like fires and floods.

3. Packaging: Since the retailer purchases from the wholesaler in break-bulk, every time a customer purchases goods, they must be packaged in nylons.

4. Provide market information to the wholesaler: The retailer is in the best position to receive raw market information because he is closest to the consumer.

The retailer can gather market information such as consumer preferences and feedback, which he then relays to the wholesaler, who in turn will relay it to the producers.

5. Provide product information to the consumers: Manufacturers occasionally offer extra details on how specific products and services should be used

The wholesaler receives this information after which he or she relays it to the retailer

The retailer makes sure to convey and explain the product information to the customer after he receives such information

6. Storage: A retailer keeps a variety of ready-made goods in his stores until they are needed.

7. Provide convenience to consumers:  Retailers sell goods in the quantity that customers desire to purchase, giving customers the convenience of purchasing by their income rather than in bulk as would have been the case with wholesalers.

Moreover, retailers provide after-sales services to consumers, which also makes for convenience.

8. Provide place utility: Retailers occasionally deliver goods to customers' homes, creating place utility.

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