Retail is the act of selling consumer products or services directly to consumers through multiple retail channels of distribution in a retail facility to make a profit. Retailers meet demand identified by a supply chain with the help of sales representatives, who are also known as sales managers. In today’s retail market, there is very little room for start-up retail businesses because of the large number of established retailers. There is a great need for retailers to penetrate their respective markets and make an impact on the existing customers by offering a new product or service or developing an existing product or service.
Online retailing has increased tremendously over the past few years and the best place to start for an online retailer is the Internet. There are several ways in which online retailing can be started. One way is to set up a web store that sells products from your own inventory. Another way is to use shopping malls that have been pre-sold or rent space to start an online retail business.
One type of outlet structure is warehouse clubs. Warehouse clubs are retail industry constructions where the stores have been organized by warehouse owners within the store. The proprietor of each warehouse club maintains a central location where all of the stores are located. Customers can visit any of the stores and purchase any of the products they need from the central location. Each store can sell products they want and have them sent directly to the customer.
There is a specific model for every type of retailer. Some retailers conduct multiple store clusters or have a main retail outlet and several subsidiary retail outlets. They can be family-owned small enterprises or publicly held corporations like Wal-Mart or Target. Other retailers have a direct sales approach, where they sell a single product line, such as T-Mobile or JCPenny or Bloomingdale’s or department store chains like Sears or Macy’s. They do not share the merchandise in those lines.
There is also a model for every type of retailer. Store clustered retailers who sell a wide range of the same products may branch into warehouse clubs or a distribution supply chain so that they can reduce their costs and get lower prices for their products. Large retailers who have a large number of locations and have a captive audience can go straight to wholesale distribution outlets to get their products or can partner with other retailers to form a mixed supply chain group.
Each of these models of retailing has advantages and disadvantages. For instance, in a store cluster the costs per sale are lower since there are fewer stores for each product line. But in a warehouse club the overhead is much lower. Also, in a distribution supply chain warehouses are useful to bring products directly to the customer without having to store them. However, the advantages to owning a chain are that it allows you to diversify your product line and lower your cost of merchandise while giving you the opportunity to add new outlets as demand increases.