Retail is a process of buying consumer products or services in bulk at wholesale or retail price and selling them to customers through various channels of distribution in order to make a profit. Retailers meet demand identified by a supply chain with varying degrees of intimacy. For example, retail shop can be located at the mall, at the corner of the street, or at any other retail outlet location. Retailers use the marketing strategy of “leverage” to raise product prices, generate sales leads, and drive business. They can also use the direct marketing technique of “push.”
A retailer, like a wholesaler, needs to have access to large quantities of a good in order to meet demand. Often, large quantities are needed to address market gaps for a specific type of good. Many manufacturers sell goods in large quantities and wholesalers can sell large quantities to retailers at retail prices. Often, retailers choose to purchase goods in bulk from manufacturers and wholesalers because they require only small minimum purchases to begin the distribution process.
Retailers rely on suppliers that can deliver quickly. In most cases, retailers have a direct relationship with the manufacturer or wholesaler. However, retailers can develop relationships with third party distribution companies. When a retailer acquires goods from a wholesaler, the wholesaler retains the rights, titles, and intellectual property of the product. Most wholesalers have standard terms and agreements for product returns; they usually require the customer to return an item that was defective or damaged to your satisfaction.
Distribution plays an important role in the retail industry. Distribution provides retailers with merchandise in different types and quantities to meet customer demands. In some retail establishments, the distribution process allows a retailer to select items and mix them in a certain way in order to create new items. Distribution may include storage, trucking, receiving, pick and pack, and display. In other retail establishments, distribution is used to obtain products for different types of customers.
Wholesale and distribution involve separate and distinct functions in retail stores. Department stores and specialty stores depend upon wholesalers and distributors to carry their inventory. In order to attract more customers, many department stores offer a catalogue of available products. Specialty stores use specialized suppliers to carry only selected products. For example, a clothing store may carry only men’s, women’s, or children’s clothing and accessories.
Hypermarkets provide a larger choice of products and increased selection at low prices. A hypermarket is like a “superstore.” Many of these stores are chain stores operating within a network of other chains. The typical hypermarket carries the widest assortment of products and services available in any area. Some hypermarkets provide services such as credit sales, a large sales force, and a one-stop buying environment.