Get to Know Retail Business and Its Characteristics

Get to Know Retail Business and Its Characteristics

We often heard about retail. However, Do we understand it in its true sense? Many people believe that retail is a huge industry with hundreds of employees.

Is that really the concept? Let’s find out in this article.

The Definition of Retail

Retail refers to the process of selling a product or service to the customers who need them. The products sold in this case are intended for consumption, not for resale. Sellers can be online stores or offline stores.

Retailers have many crucial functions in facilitating sales. Here are the functions,


Producers produce the products in a massive volume then sell them to the particular customers who purchase them in a bulk. However, customers needs products from different producers. 

In this case, retailers fulfill the needs by collecting products from various  producers then selling them to those who need them. 

Purchasing in mass amounts

Retailers purchase a huge number of products from producers but sell them in a pieces, to the customers. 

Communication line

Retailers have direct contact with their customers. It shapes the communication line that important between producers and customers. 

Producers will try to communicate the strengths of their products, discounts, promotion, or others offering to the retailers.

Then, retailers will communicate all the information to their customers. It marks the reasons retailers are important in business in which connecting between producers and customers.


Retailers are an important final marketing network. To increase sales at retailers, producers use strategies like placing, advertising, offering, banners, and promotions.

The Different Between Retailers and Wholesalers

Wholesalers sell products to retailers so they can resell them while retailers sell products directly to customers. It is rare for wholesalers to sell directly to customers, although a small percentage of them do the work.

Usually, they sell in bulk so they can sell them at an affordable price than the price in retails. In conclusion, pricing is a significant difference between retailers and wholesalers. Wholesalers are much cheaper than retailers. 

How Do Retailers Work?

Supply chain retailers consist of producers, stockists, retailers, then customers. Customers are directly connected to the retailer, while retailers are connected to the wholesaler and wholesalers to the producers.

Here are the details,

  • Producers (manufacturing companies) produce products by using machines, labor force, and raw materials.
  • Wholesalers purchase products from producers and sell them in a bulk to retailers.
  • Retailers sell their products in pieces to customers by increasing the price. Producers, usually, will determine the highest price for retailers.
  • Customers purchase products to be used by themselves, not to sell.

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