Retailing can be defined as the process of selling goods and services to consumers. In order to ensure the success of a retail business it is imperative for owners to analyze the fundamentals of retail industry. With the help of basic understanding of principles of initiating and growing retail business, it can be possible for businesses to remain successful in the industry. It is essential to determine the main factors of a retail business regardless of types of goods and services that a retail business sells. Retailers can also be referred to as the only type of business that has been able to “break bulk”.
Retailers are the customers of wholesalers, who purchase from wholesales in smaller quantities. Retail business is more likely to be defined as a type of customer, instead of being explained as a business activity (Lewis and Leslie, 2007). This definition can be used to differentiate between a retailer and other distributive traders, the factor that distinguishes a retailer and wholesaler is that, wholesalers sell goods and services to retailers, while retailers sell commodities directly to final consumers.
All companies that market their products and services to end consumers come under the umbrella of retail business. But there are a number of directions that one can take from here. For new starters, there are departmental stores, discounted stores, convenient stores and even seasonal outlets. All of these may have their own peculiarities, however, for the main part the discussion overlaps to all parts of retail business. This part of discussion will focus more on the fundamentals of retail organization.
In the past couple of years, there have been drastic changes in the basics of general retailing organizations. Previously, it was strictly a made-to-order marketplace for garments, but now the setting is completely different. At present, the retailing setting is more on customized and ready to wear clothes market. Going through a glossy magazine, choosing the color, size and type of clothing is now a common trend in the retail business.
In some areas of the globe, the retail industry is dominated by small family oriented and locally target stores, but this marketplace is more and more being captured by million dollars international companies like Wal Mart and Tesco. Along with others, they are the giant retailers that have managed to set huge distribution networks, inventory management schemes, financial agreements and planning for wide scale marketing.
There are, on the other hand, many firms that perform retailing activity but are not classified in the umbrella of retail business. For instance, a factory unit may involve in retail activity by marketing recycled goods in the shop that is close to its production facility. Across the world, the word 'retailer' is just categorized as such for governmental reporting if the organization gets around half of its earnings from selling products to the end customer.
The term retail business not just related with the marketing of physical objects like clothes or bread, but also refers to ...