Who is Retailer? – Types, Advantages, and More
Retailer is an adjective used in commerce to name the activity carried out at retail. The term is also used as a noun about who sells under this modality.
Sale or distribution is that which proceeds from a commercial enterprise to the final consumer. In the distribution chain, therefore, it is the last link since the product reaches its destination.
It is essential to say that there are several types of retailers; however, retail businesses’ role must be emphasized. We refer to those neighborhood stores that become our lifeline in many moments. Complain more and more about the severe damage that large surfaces and chains are causing them, with which they cannot compete.
The retailer often refers to small businesses or family businesses. Shops, street stalls, and small shops are examples of retail trade. These are the last link in the distribution chain since they focus on selling the finished product to the final consumer.
When we talk about goods, we must clarify that we are referring to manufactured products and that they are finished. That is, we are not talking about raw materials.
The Main Features Of The Retailer Are:
- It is the one that is in direct contact with the client.
- Buy your products wholesale.
- They are the last link in the distribution chain and the penultimate link in the value chain.
- They operate with small amounts.
- Retail trade integrates all those stores and small family businesses that operate in the economy.
Types of Retailers
- Based on several criteria, the retailer can be one type or another. In this case, we will proceed to classify the types of distributors and retailers based on two main criteria: the organization of the company and its form of sale.
- Based on its organization, we can classify retail into five types:
- Independent commerce: Typical store or establishment of small dimensions dedicated to the sale.
- Associated/integrated commerce: These are independent businesses, but they are inside large areas. The best example is shopping malls.
- Large distribution: Large wholesale companies that operate as retailers. Very common in supermarkets.
- Franchise: Store that, despite being independent, is part of a network of stores that follow the same criteria while often offering similar products.
On the other hand, based on their form of sale,
We Can Classify The Retail Distributor Into Four Types:
- Traditional trade has three main elements: counter, seller, and warehouse.
- Self-service marketing: It is the consumer who is dispatched.
- Mixed commerce: Where the self-service is present, but when it comes to charging, there is a person in charge of collecting and receiving the sale.
- Sale without commercial establishment: Any sale made through street vending
They are the professionals who will be on the front line of sales and in contact with the customers who will buy them. In other words, they are all those businesses in direct contact with their final consumers.
Advantages of Retail
Although its negotiation capacity against manufacturers and wholesalers is limit, it has a series of advantages for the consumer and the rest of its industry.
- A large number of final sales: retailers concentrate a large part of the sales of all products since most goods intend for local consumers to which retail companies have better access.
- Favorable location: the geographical location of retail outlets makes it considerably more. Manageable for the consumer to interact with them anywhere in the world. Something that would be financially unfeasible for manufacturers or wholesalers if they wanted to do so.
- Direct contact with the final consumer: perhaps the most significant benefit of all, since promoting other points such as loyalty allows you to interact with the consumer in multiple ways to boost final sales.
- Loyalty potential: Retail store employees can bond with regular customers, thereby establishing trusting relationships with them that increase repeat sales to them in the long run.
- Easy management: At an organizational level, a retail business has fewer associated costs. The number of elements to control and optimize is also smaller, making it easier to manage efficiently.
Disadvantages of Retail
Of course, not everything is advantages. Retail outlets also have several weaknesses compared to other links in the distribution chain.
- Negotiation capacity: as they are small stores with limited economic power, the economy of scale. Purchasing products in large quantities to obtain direct discounts from the manufacturer is out of their hands, and they force to negotiate with wholesalers and accept less favorable conditions for your interests
- Profit margin: as bargaining power is minimal, the cost of the product that arrives at their stores after distribution means that they have to offer a price with a low margin for consumers to buy it, or they would risk having unsold products in the market
A retailer is a business that acts as the last point of contact in the distribution chain with the final buyer of consumer goods—being the penultimate link in the distribution chain of any possible product.