Retail Trade

A retailer is a trader who purchases goods in small quantities from wholesalers or directly from manufacturers.


A retailer is a trader who purchases goods in small quantities from wholesalers or directly from manufacturers. They then sell these goods in smaller units to the public or final consumers.

Characteristics of Retail Trade

  1. Unit Sales: Retailers sell products individually or in small quantities.
  2. Wide Variety: Retailers stock a diverse range of goods to cater to varying consumer preferences.
  3. Direct Selling: Retail trade involves selling directly to end consumers.
  4. Small Quantity Purchases: Retailers buy goods in smaller amounts compared to wholesalers.
  5. Consumer Goods Focus: The products primarily involve consumer goods.
  6. Small Shops: A significant number of small retail shops are involved in this trade.
  7. Goods Source: Goods are mainly obtained from wholesalers.
  8. Proximity to Consumers: Retailers bring goods closer to the consumers, ensuring convenience.

Read: Factors that should be Considered When Starting a Retail Business


Functions of a Retailer

  1. Product Variety: Retailers offer a variety of goods to meet consumer demands.
  2. Unit Selling: They sell products in individual units.
  3. Accessibility: Retailers bring products closer to consumers for easy purchase.
  4. Credit Facilities: Some retailers extend credit facilities to consumers.
  5. Consumer Advisory: Retailers provide advice to consumers on product choices.
  6. Information Flow: They communicate insights to both manufacturers and wholesalers.
  7. Completing Production: Retailers finalize the production process by getting goods to consumers.
  8. Advertising: Retailers promote products through advertising efforts.
  9. Weighing, Measuring, Packaging: Retailers handle weighing, measuring, and packaging of products.
  10. Convenience: Retailers open at times convenient for consumers.
  11. After-Sales Services: They offer post-purchase assistance to consumers.

Read: Mail Order Business: Features, Advantages, and Disadvantages

Display of Vegetables. Image Credit: Stefan Pflaum on Unsplash.

Factors Leading to Retail Shop Failures

  1. Wrong Purchases: Making incorrect purchase decisions.
  2. Over-Spending: Excessive spending without proper planning.
  3. Lack of Experience: Insufficient industry knowledge and experience.
  4. Avoiding Insurance: Neglecting insurance coverage for the business.
  5. Lack of Advertisement: Failing to promote the business and products.
  6. Lack of Fore-sight: Not planning for future challenges or opportunities.
  7. Credit Facilities Issues: Offering credit facilities without proper assessment.
  8. Lack of Bookkeeping: Not maintaining accurate financial records.
See also  Living and Non-Living Things: Definitions and Characteristics

Factors to Consider when Making Purchases as a Retailer

  1. Quality: Ensuring purchased goods meet acceptable quality standards.
  2. Quantity: Buying appropriate quantities based on demand.
  3. Terms of Payment: Evaluating payment conditions and timelines.
  4. Packaging: Considering the packaging of goods for presentation and preservation.
  5. Methods of Delivery: Assessing delivery options and reliability.
  6. Terms of Trade: Understanding trade terms and conditions.
  7. Credit Facilities: Evaluating the extent of credit options offered to retailers.


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