BIZCHINA / Trade
Retail, retailor, and retailing
(chinadaily.com.cn)
Updated: 2006-10-19 15:31
Retailing is the sale of goods or commodities in small quantities
directly to consumers. Also known as to sell at retail. For example: We
began our retailing business by selling a locally made product to the
community.
In commerce, a retailer buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler, and
then sells individual items or small quantities to the general public or
end user customers, usually in a shop, also called store. Retailers are
at the end of the supply chain. Marketers see retailing as part of their
overall distribution strategy.
Shops may be on residential streets, or in shopping streets with little
or no houses, or in a shopping center or shopping mall. Shopping streets
may or may not be for pedestrians only. Sometimes a shopping street has a
partial or full roof to protect customers from precipitation.
Shopping is buying things, sometimes as a recreational activity. A cheap
version of the latter is window shopping (just looking, not buying).
Kinds of retailers
A large shop is called a superstore or megastore. A shop with many
different kinds of articles is called a department store.
Many shops are part of a chain: a number of similar shops with the same
name selling the same products in different locations. The shops may be
owned by one company, or there may be a franchising company that has
franchising agreements with the shop owners (see also restaurant chain).
Some shops sell second-hand goods. Often the public can also sell goods
to such shops. In other cases, especially in the case of a nonprofit
shop, the public donates goods to the shop to be sold (see also thrift
store). In give-away shops goods can be taken for free.
The term retailer is also applied where a service provider services the
needs of a large number of individuals, such as with telephone or
electric power.
Retail pricing
The pricing technique used by most retailers is cost-plus pricing. This
involves adding a markup amount (or percentage) to the retailers cost.
Another common technique is manufacturers suggested list pricing. This
simply involves charging the amount suggested by the manufacturer and
usually printed on the product by the manufacturer.
In Western countries, retail prices are often so-called psychological
prices or odd prices: a little less than a round number, e.g. US$6.95. In
Chinese societies, prices are generally either a round number or
sometimes some lucky number. This creates price points.
Often prices are fixed and displayed on signs or labels. Alternatively,
there can be price discrimination for a variety of reasons. The retailer
charges higher prices to some customers and lower prices to others. For
example, a customer may have to pay more if the seller determines that he
or she is willing to. The retailer may conclude this due to the
customer's wealth, carelessness, lack of knowledge, or eagerness to buy.
Price discrimination can lead to a bargaining situation often called
haggling -- an argument about the price. Economists see this as
determining how the transaction's total surplus will be divided into
consumer and producer surplus. Neither party has a clear advantage,
because the threat of no sale exists, whence the surplus vanishes for
both.
This article uses materials from www.about.com, and the Wikipedia, the
free encyclopedia.
(For more biz stories, please visit Industry Updates)
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