A merchant, or retailer is an organization that offers products such as clothing food items, groceries, or vehicles directly to consumers via different distribution channels, with the aim of making money. The retailer can be located in a physical location or on the internet.
Retailers are the consumers-facing portion of supply chains and the majority of consumers have frequent interactions with them. They are available in many different kinds, styles, and sizes.
What Is a Retailer?
The majority of retailers purchase goods from wholesalers, manufacturers, or other distributors and then sell them back to the general public. The largest retailers, like Walmart and Target, purchase products in large quantities from wholesalers or manufacturers However, small, family-run pharmacies or your neighborhood supermarket can purchase at the same stores or through smaller vendors.
In either case, the retailer will sell the items to the consumer at a markup – the difference between the purchase price and the price they resell. This is the way retailers earn money.
The principal categories of merchandise that retail stores sell are:
- Durable or hard-wearing goods (such as cars or furniture)
- Soft products (such as footwear or clothing that have a life span)
- Art-related products (such as musical instruments, books, or art materials)
How Retailers Work
Retailers have to be established to offer direct sales to consumers in one form or other. This is not just about making taking decisions regarding physical and digital stores, but also on how to promote their products and interact with customers.
The majority of modern retailers base their strategic choices on the following criteria:
- The kind of shop (e.g. large national chain as opposed to. smaller stores in specific cities as opposed to. solely online)
- The market that is served (e.g. the high-end product consumer as opposed to. the cost-conscious consumer)
- A wide selection of products is optimal (unless you’re sure it’s Amazon with everything)
- Service to customers (e.g. the in-store representative for customer relations in contrast to. an 800 toll-free number)
- The market’s positioning (e.g. customers with discretionary income. customers with disposable income)
Types of Retailers
Brick-and-mortar stores aren’t all the retailers. There is a myriad of small, single-person businesses offering their products online such as bath oil and Bermuda shorts.
The less traditional companies can also be classified as retailers. For instance, an artist who sells handmade jewelry at a craft fair is considered to be a retail store, in the event that the individual is selling products to consumers so that they can earn an income.
Retailers aren’t just in the business of selling items and services; they may also be service suppliers. For instance, the retailer of consumer electronics Best Buy has a Geek Squad department within its retail outlets, which provides repair services for the items it sells. Additionally, it also offers house visits. Geek Squad makes house calls and offers a customer service department.
Here is a listing of the most common retail formats, or kinds:
- Mortar and brick (i.e. it is a physical structure)
- Special occasion (refers to shows like fairs or art shows)
- Catalog (refers to business transactions that are conducted entirely via a printed catalog or an online one)
- Pop-up (temporary brick-and-mortar store that is well-known during the holiday season for shopping)
Nowadays, retailers must be multichannel which means they have to sell their products across a variety of stores (or the retail channels) for them to achieve success. For instance, Amazon has added brick-and-mortar stores as an addition to its online operations. Customers today want several options to shop with their preferred brand.
The standards for the retail industry are the most widely accepted guidelines for running the retail industry. They can be extremely beneficial in helping both existing and new retail companies run more efficiently. There are two crucial rules that retailers must be aware of.
GS1 Retail Industry Standards
GS1 is specifically focused on supply chain management and is based on its GS1 number system, which is also used to create Universal Product Codes (UPC). This system boosts efficiency by permitting retailers to manage checkout and inventory systems electronically. GS1 assists in other important information exchanges throughout the supply chain, from the manufacturing process to sales.
American National Standards Institute (ANSI)
The Accredited Standards Committee of the ANSI establishes the standards for the exchange of digital data in a vast spectrum of industries. These standards are used to guide the operational processes of many retail companies. For instance, electronic data exchange (EDI) is a document standard that allows the connection of multiple computer systems in various places. 3 This allows a retailer to transfer order information from its web-based store to warehouses or distribution centers. Every retail operator should be familiar with different ANSI standards.
Top 10 U.S. Retailers
The top 10 U.S. retailers (based on the sales of 2019) span from food-related businesses to those selling medicine and online stores.
- The Kroger Co.
- Walgreens Boots Alliance
- The Home Depot
- CVS Health Corporation
- Lowe’s Companies
- Albertson’s Companies
How to Become a Retailer
The decision to open an online retail business requires lots of planning and preparation from analyzing your market to creating your strategy to recruit employees. Before you can begin selling, ensure that you have all the required documents, both legal and other necessary. You’ll need an Employer Identification Number (EIN), which is akin to a Social Security number for your company. Many of the companies you deal with will require an EIN prior to conducting business with them. It’s easy to make an application for an EIN through the IRS website.
The possession of an EIN is a sign that you’re in charge of a range of taxes such as sales tax. Be aware of the state and local taxes, and be acquainted with the amount you’ll have to pay local and federal government bodies. Contact the chamber of commerce in your area in case you’re not sure what to do.
Retailers also require permits for business, and they depend on the product you’re selling and also the regulations in your town or state. Contact your local government office to learn what you’ll need. State and local laws will determine whether you require the resale license, industry-specific certificate, or certification of occupancy to operate your brick-and-mortar stores.