What are the retailers, their types, and describe their functions?

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Retailers sell products/ goods to final consumers for consumption or use. Retailers buy the products from different sources like manufacturers, wholesalers, traders, etc. basis the need and want in the market. They are considered the final link with the consumer in the marketing/ distribution channel. Most of the retailing in retail stores is through new concept of retailing called non-store retailing. This type of retailing is becoming popular. It is direct selling to customers via infomercials, telecalling, internet selling, ecommerce, direct mail, personal selling, etc.

Retailers can be broadly classifies as small scale retailers and large scale retailers.
i) Small scale retailers –
a) Unit stores – these are general stores or single line stores like clothes, gift shops, grocery stores, utensils, book shops, bakery, etc.

b) Street traders – they sell products on streets, footpaths, etc. They usually sell items that can be easily carried and are quite unique like, mobile accessories, gloves, fancy accessories, etc. They can often be found at bus stands, railway stations, etc. on busy places at times when people go out for shopping, to work etc.

c) Market traders – these open for selling on specific days and move around wherever there is an event, or time specified market. They have a fixed location and arrangement made for selling like a selling van, setting a kiosk, outlet, etc. on a fixed location. For example, farmers market, magic event, crockery sales, etc.

d) Hawkers and Peddlers – these retailers sell goods door to door on their cart, bicycle, etc. They carry items that are in demand and as the demand changes because of various reasons like season change, they start selling different products. A hawker selling woollen clothes in winter may change to selling clothes suitable for warm climate in summer.

e) Cheap jacks – these retailers have a specific place in a locality but do change locations for business. They usually sell unbranded items like clothes, plastic vessels, kitchen utensils, shows, etc. They set up the business for a specific time before changing location.


ii) Large scale retailers –
a) Departmental stores –
a departmental store has wide variety of products being sold under one roof. From there, one can find a raincoat to a pen. They sell a particular specialized product or an entire product line.

b) Discount store – here standard items are sold at lower prices. The business is done on higher sales and lower profit margins. For example, Wal-Mart and 49-99.

c) Chain stores – these are stores near residential areas selling the same kind of products in different localities. These can be in the entire region, state or nation. For example, Nike stores, Dell, Raymond, Big Bazaar, etc. They have their chains in almost all towns. These centrally owned and managed. They mostly deal in same products across all chains like, fast food chains, Nike products, etc. The items for sale are bought centrally and sent across to all the chains. Since it operates under the same brand, the prices and quality is standardized. For example, a McDonald’s outlet will have same kind of price range, and feel and appearance of the store in different locations.

d) Mail order houses – through this the seller shares information about the product via different means like advertising, press, post, catalogue, telecalling, etc. The buyer doesn’t visit the seller but orders the product and receives it via post, courier, etc. The business is done by mail or other means without inspecting the product by the consumer. TV advertising like infomercials are considered as extension of mail order houses. Here the sellers provide as much information as possible to the consumer through different media as customer will buy the product basis the advertising.

e) Super market – it is a large retail store which sells a variety of consumer goods with self-service. They sell food items and articles of daily needs like, cold cream, bakery, vegetables, meat, groceries, fruits, dairy, etc. They deal in credits and consumers move around the store to choose products of their choice from a wide variety.

f) Super stores – These are oversize department stores and also known as hypermarkets. They carry a wide range of general merchandise and FMCG’s. A customer can get services like haircuts, salons, restaurants, banking, etc. at these stores.

g) Convenience stores – These are small stores that deal in limited-line of high selling goods at a higher price. They are like mini-supermarkets. They are located at the corner and have fast food franchise or fast food items also.

h) Consumer cooperative – It is an association of consumers themselves who buy products in large bulk for members as well as non-members. The consumers or locality residents themselves manage all the activities from designating a manager to setting the policies of the store.


Below are major functions of retailers-
1. Buying and Assembling –
A retailer deals with different kind of products from different manufacturers and brands. They buy these products from different wholesalers and store them in their shops or stores to be bought by the consumers. They buy from the most economical source to have maximum profit margin. Different retailers have different business objectives which can be profit oriented or quality oriented.

2. Warehousing and storing – Retailers assemble products from different suppliers and store them to be supplied to the consumers on time. They keep enough supply stored with them so as to meet the demand in the market.

3. Selling for final consumption – The retailers sell products to final consumers for use and consumption. They are the final link in the distribution channel.

4. Promotion of brands – The manufacturers and wholesalers encourage retailers to display their products on shelves and selling counters to increase sales. Retailers help a brand in getting exposure in the market. Manufacturers try to give higher profit margins to retailers for meeting certain sale targets. Retailers try their best to make sales through salespersons, display on shelves, window displays, hoardings, etc. to maximize sale of products that gives them higher profits.

5. Credit facilities – The retailers sell products on credit to buyers. They try influencing buyers by accepting payments on installments, etc. and bear the risk of bad debts.

6. Risk bearing – Like wholesalers, retailers also bear the risk of handling the purchased products. They carefully handle products in their stores till the product is made available to the consumers. For example, Perishable commodities like milk and bread need to be sold before the expiry date and feeble products like glass and television sets needs careful handling. The products are exposed to natural risks like fire, earthquakes, rains, etc. Customer preferences also change so the already purchased products with retailers may have a reduced demand in the market. If these products are not sold the retailer has to bear the risk.

7. Grading and packaging – many times the products which are not graded or packaged by wholesalers are packaged by the retailers for convenient selling. The products are packed in small containers of packages with proper information for the convenience of the customers.

8. Source of market information – Since the retailers are in constant touch with the consumers, they are the best source of information for doing market analysis by the manufacturers and wholesalers. They have ready data available regarding the sales of the product in the market, likes and dislikes of consumers, their feedback, their preferences, etc.

9. Customer education – manufacturers ensure that the retailers are well educated about their products. Sometimes they even have their representatives sent to retailers for answering queries of salesmen as well as customers. Retailers play a big role in passing on the information to the customers about the functions, benefits, utility, and characteristics of a product.

10. Cater to the needs of all kinds of customers – Retailers cater to the needs of all kinds of customers’ basis their financial as well as social status. Retailer’s advice consumers about products that suits his/ her needs. For example, a clothes merchant will advice a rich person to go for branded jeans, while a customer will less paying capacity will be advised of much cheaper options.

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