Understanding Retail - What is Retail ?
Before understanding the concept of retail, let us first go through few terminologies.
Jack owned two laptops which he sold to Mike. In this case Jack is the seller while Mike is the buyer. Laptops are the goods which were earlier in Jacks custody and now belong to Mike.
What is Retail ?
Retail involves the sale of goods from a single point (malls, markets, department stores etc) directly to the consumer in small quantities for his end use. In a laymans language, retailing is nothing but transaction of goods between the seller and the end user as a single unit (piece) or in small quantities to satisfy the needs of the individual and for his direct consumption.
Let us understand the concept with the help of an example.
Tim wanted to purchase a mobile handset. He went to the nearby store and purchased one for himself.
In the above case, Tim is the buyer who went to a fixed location (in this case the nearby store). He purchased a mobile handset (Quantity - One) to be used by him. An example of retail.
The store from where Tim purchased the handset must have shown him several options for him to select one according to his budget and need.
From where do you think the store owner (also called the retailer) purchased all the handsets?
Here the manufacturers and the wholesalers come into the picture.
The retailers purchase goods in bulk quantities (huge numbers) to be sold to the end-users either directly from the manufacturers or through a wholesaler.
The Supply chain
|Manufacturers||........................||Retailers||................||End User (Consumer)|
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