Retail Trade


What is Retail trade?

Retail trade is the final activity of the distribution chain. It consists of the sale of goods and services directly to final consumers.

The companies that carry out this activity are called retailers. Retail trade includes the sale of goods and services retail. Therefore, the clientele is abundant and the products are purchased for personal use. Examples of these companies are clothing or clothing stores, food supplies and stores selling appliances, and technological items. Commercialization of capital goods is excluded from retail trade.

This type of trade constitutes the end of the chain of distribution of goods and services. It's the link between wholesalers and consumers or end users. The trade the bulk is the previous link in the chain of distribution and activity is buying and selling products in large quantities. Sometimes they sell at a discount to other organizations for commercial purposes.

Retail trade also covers the range of services associated with the installation, advice and warranties of products sold. In some cases, these services lead to an increase in the price of the product.

Types of Retail Trade

The highly varied retail activity, therefore, its classification depends on the specification to be characterized.

Depending on the ownership of the business, they are classified as:

  • Independent: They are companies owned by an individual or group of individuals. That is, it has no dependency relationship with other stores.
  • Store chain: In a set of centrally managed stores. They are owned by the same individual or group of individuals.

According to the activity they perform, they are classified as:

  • Specialty stores: They thoroughly know the characteristics of the products they sell. For example, sports, technology or optical stores.
  • Warehouses: They are establishments that are divided by departments. In them there are goods organized by categories in the self-service modality. For example, the Walmart chain of stores. These stores, in turn, can be divided into two types:
    • Discount stores: These stores sell products at a lower price than conventional stores for the general public.
    • Warehouse clubs: These types of establishments offer discounts on products to customers who cancel an annual membership.
  • Supermarkets: These establishments are generally focused on the sale of food. Also, they have dedicated themselves to the sale of household items in general.
  • Electronic stores: Retailers offer their products through web pages. The advantage of this modality is that it reduces the problems of border limitation.

Importance of Retail Trade

Retail trade allows brands to have greater geographic reach. In addition to a higher level of penetration in areas that manufacturers or wholesalers could hardly access on their own. It also allows consumers to access a greater number of goods and services.

Another benefit for consumers is related to services. Among these are:

  • Financing options: That allow the acquisition of the goods they need without having the cash at the time of purchase.
  • After-sales services: such as installation, conditioning or consulting, providing quality information that isn't easily accessible to all customers.

Finally, retail trade is an extremely important source of information for brands. It allows them to know the updated characteristics of consumers, as well as their preferences and dissatisfaction. It's characteristic, it provides valuable constant feedback to manufacturers.

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