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Classification of Retailers

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Last updated date: 13th Jul 2024
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What do We Mean by Retailers?

The English word "Retailer" was derived from the French word "Retailer," which means "to cut again." As a result, cutting small pieces from massive masses of merchandise is clearly what selling entails. A retailer is a final link in the chain of goods delivered to customers. He acts as a liaison between wholesalers and customers.

According to the American Marketing Association, retailing is "the act of selling directly to the final consumer for personal and non-business use." It includes all of the producer's direct sales efforts, including those conducted through his retail locations, door-to-door solicitation, and mail-order operations. The retailer acts as a middleman in the marketing channels, a professional who communicates with both the consumer and the producer, and a vital link in the marketing chain.

Classification of Retailers

The more popular classification of retailers is a store and non-store retailing. Below are the different types of classification of retailers -

  1. Store-Based: Store-based formats are further classified into two types based on ownership of merchandise sold.

  2. Non-Store Retail Classification: Non-Store retail businesses prioritise direct contact with customers. This could be non-personal (television, internet, mail, catalogues, or phone) or personal (telephone) (direct personal selling).

  3. Service-based classification: These merchants specialise in providing various services to their customers. Banking services, rentals, electricity, and cooking gas are just a few available services. A service's success is determined by several criteria, including the level of customisation that can be offered to fit the client's requirements, the uniqueness of the service and delivery within the timeframes specified, the use of cutting-edge technology, and so on.

Classification of Retailers

Classification of Retailers

Classification Based on Ownership

  1. Sole Proprietorship: This category includes most small business ventures founded as sole proprietorships. A sole proprietorship is a business owned by just one person who is typically in charge of managing the business's day-to-day operations.

  2. Partnership: A partnership is one of India's most common business structures. A partnership is formed when two or more people share ownership and management of a business.

  3. Joint Venture: A joint venture is the formation of a third or new entity as a result of collaboration between two or more parties who have agreed to manage business operations in a specific area by pooling their resources and sharing profits per the contract's clearly stated terms and conditions.

A Retailer's Essential Job Duties

  • A retailer is in charge of both the purchasing and the assembly of goods. A retailer must find the most cost-effective way to buy products from suppliers and pass the savings on to customers.

  • Retailers are responsible for storage and warehousing. They stock the products in bulk and distribute them based on customer demand. Storekeeping and warehousing helps to ensure that items are always available to customers.

  • A retailer's main job is to sell products to customers; to do so; they employ various strategies and business methods to achieve their strategic goals.

  • A retailer's main goal is to increase consumer happiness by providing high-quality goods and services on a cash-and-credit basis. As a result, the shop always bears the danger of accruing bad debts due to the customer's failure to pay the due amount.

  • Retailers play an important role in introducing new products to the market because they serve as the consumer's point of contact and have the opportunity to discuss the benefits and characteristics of new products directly with prospective customers.

  • Retailers are in charge of creating attractive product displays, visual merchandising, product marketing, and advertising.

Case Study

Taking Best Buy as an example, how has it been raised as a retailer of many of the demanding brands? Explain.

Best Buy is an excellent example of a traditional retailer. It buys products at cost from manufacturers such as Sony and Whirlpool and then charges customers more for them. Most items sold by Best Buy are not manufactured by the company.

Modern companies have chosen to combine the traditional roles of manufacturers and retailers. Apple is an excellent example of a company that manufactures and sells its products. In the 1990s, Apple began building retail stores worldwide to help market and sell its products. Apple cuts out the middleman and, thus, keeps the retail markup money for itself. Since then, Apple has allowed other retailers, such as Best Buy, to sell their products.


The retail industry has significantly changed in recent decades due to the rapidly evolving globalised and technologically driven corporate environment. Walmart, the world's largest retail company at the moment, operates globally by establishing hypermarkets in various countries using modern communication and information systems technology.

FAQs on Classification of Retailers

1. What are the types of retailers?

The two primary types of retailers are itinerant and fixed retailers. Comparison of itinerant retailers' hawkers, peddlers, and cheap jacks. Street vendors and market vendors Fixed retailers are divided into small-scale and large-scale retailers.

Vendors selling used items on the street are examples of small-scale retailers. There are general, speciality, and unified stores. Department stores are large-scale retailers. Mail-order houses, cooperative stores, multiple stores, chains, hire-purchase businesses, supermarkets, and fixed-price stores are all examples of retail establishments.

2. What are some of the important characteristics of retailers?

Below are some of the important characteristics of retailers - 

(i) The retailer acts as the final distribution intermediary and the link between the wholesaler and the final consumer.

(ii) A retailer purchases products in bulk from a wholesaler and then sells them to customers in smaller quantities.

(iii) A retailer maintains personal contact with their customers.

(iv) A shop display of a retailer's products is sufficient to attract customers.

(v) In addition to performing all the marketing tasks that a wholesaler does, retailers focus on advertising. Retailers, also known as general merchants, sell various goods.

3. What is the importance of retailing?

In retail, the revenue model is straightforward markup. Retailers buy products at cost, then add labour, equipment, and distribution costs, as well as the required profit margin, before raising the selling price. Retailing benefits the economy, consumers, and creators alike. The majority of actual client sales take place in retail establishments. They are a resource for customers to trade and discuss important information and a marketing tool for brands. Furthermore, the retail industry contributes significantly to the economy. It boosts the economy, creates jobs, and is a popular shopping destination during the holiday season.