Table of Contents
Types of Retail Trade: Large-Scale Retail Trade:
These retailers operate with large capital and sell goods on a large scale. Examples include:
Departmental Stores:
Departmental stores are large retail outlets divided into different sections or departments, with each department selling a specific type of goods such as clothing, electronics, or household items. They are usually located in major cities and require large capital to operate. Departmental stores offer a wide variety of goods and provide services such as customer assistance, but their prices may be higher due to high operating costs.
Supermarkets:
Supermarkets are large self service retail stores where customers select goods from shelves and pay at checkout points. They sell a wide range of goods, especially food items, beverages, and household products. Supermarkets operate with large capital, use modern equipment, and rely on high sales turnover. They save time for customers but usually do not grant credit sales.
Chain Stores:
Chain stores are a group of retail shops owned and controlled by one organization. They sell similar goods and operate under the same management, pricing, and policies. Chain stores benefit from bulk buying, uniform pricing, and reduced operating costs. They provide standard quality goods but often lack flexibility in pricing and customer relations.
Mail Order and Online Retailing:
Mail order and online retailing involve selling goods through catalogues, telephone, or the internet. Customers place orders without visiting a physical shop, and goods are delivered to their homes. This type of retailing offers convenience and a wide market reach. However, customers cannot physically inspect goods before purchase, and delivery delays may occur.
SEE MORE: Large Scale Retail Trade: Types, Advantages And Disadvantages
Functions of a Retailer
The retailer performs many important functions in the distribution of goods.
- Buying: The retailer buys goods from wholesalers or sometimes directly from manufacturers. This function is important because it helps to move goods from where they are produced to where they are needed. Retailers carefully choose the type, quality, and quantity of goods to buy based on the needs and preferences of their customers.
- Selling: Selling is the main function of a retailer. The retailer sells goods directly to the final consumers in small quantities. Through selling, retailers make goods easily available and convenient for consumers, who may not be able to buy in large quantities or travel far to purchase goods.
- Breaking Bulk: Retailers break large quantities of goods into smaller units that consumers can afford and use. For example, a retailer may sell a carton of soap as single bars. This function makes goods affordable and suitable for individual consumers.
- Storage: Retailers store goods in their shops or warehouses until consumers need them. Storage helps to ensure that goods are available at the right time and place. It also helps to balance supply and demand, especially for goods that are not bought every day.
- Risk Bearing: Retailers bear various risks associated with selling goods. These risks include theft, fire, damage, and changes in consumer taste. Since retailers own the goods they sell, any loss that occurs before the goods are sold is their responsibility.
- Providing Information: Retailers provide information to both consumers and producers. They inform consumers about new products, prices, and how to use goods. At the same time, retailers give feedback to wholesalers and manufacturers about consumer preferences, complaints, and changes in demand.
- Granting Credit: Some retailers allow customers to buy goods on credit and pay later. This function helps consumers who may not have enough money at the time of purchase. By granting credit, retailers build customer loyalty and increase sales, although it also involves the risk of bad debts.
- After-sales Services: Retailers often provide services after selling goods to customers. These services may include delivery, installation, repairs, and handling customer complaints. After-sales services help increase customer satisfaction and encourage repeat purchases.
SEE MORE: Small-Scale Retailing: Types and Reasons for Survival
Differences in Functions between the Wholesaler and Retailer in the Distribution of Commodities.
| Wholesaler | Retailer |
| Buys goods in large quantities from manufacturers | Buys goods in smaller quantities from wholesalers |
| Sells goods to retailers | Sells goods directly to final consumers |
| Breaks bulk for retailers | Breaks bulk further for consumers |
| Operates with large capital | Operates with smaller capital |
| Provides storage for large quantities | Provides storage for smaller quantities |
| Gives credit mainly to retailers | Gives credit mainly to consumers |
Final Thoughts
The retailer is an important link in the channel of distribution. By making goods available to consumers in small quantities, providing useful services, and linking producers with consumers, retailers help to ensure that goods reach the right people at the right place and time. Understanding the role of the retailer helps students appreciate how goods move from producers to consumers in an economy.
Tags
Large scale retailing, Supermarkets, Departmental stores, Chain stores, Online retailing, Storage, Risk bearing, Credit, After sales service
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