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Types of Retailing Trade

Last updated date: 16th Apr 2024
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Retail Trade Meaning and Types

Retail trade is a business activity that is performed; selling goods directly to the consumers is known as retail trading. It doesn't provide goods or material to the corporations. It acts as a final distribution channel in the journey of selling goods from the manufacturer to the consumer. It doesn't deal with the wholesale or lump sum amount of goods and services. The shops which use these retail trading are known as retail outlets of a particular company or a product. And the persons who perform these trading activities are nothing but retailers.


The retail trade bridges the gap between manufacturers or wholesalers and consumers. The trading activity will be performed in various ways. The consumer can come to the retail store and purchase his requirements. Also, the orders can be taken from the phone or online, etc. Retail trading also has some strategies to provide festival offers, discounts, price reductions while placing bulk orders, etc.

The business activity of selling items to the final consumer, or ultimate customer, is known as retail trade. It serves as a link between wholesalers or manufacturers and the product's end users. 

Typically, retailers sell things to consumers in modest amounts for personal use alone, not for resale or company.

The final phase in the distribution chain is retail. The retailer will purchase the goods in bulk (big quantities) at a discounted price from the wholesaler or, in some cases, straight from the producer. 

The firm then offers the goods to the ultimate consumers in small units or quantities at retail prices, profiting in the process.

Types of Retailing Trade

So we call it retail trade when the goods are sold to the final consumer for personal use. Buying a thing from a store or a roadside hawker is still retail trade. So how can we categorise the different retailers we encounter? 

We can categorise them by size or ownership modules. One simple technique is to categorise them as fixed or not. 

  1. Itinerant Retailers

These are retailers who don't have a set location. Their business is distinguished by frequent shop relocations. They are retailers even if they do not have a physical location.


  • The operation is tiny. 

  • Itinerant retailers also have capital constraints.

  • They mainly deal in everyday commodities like fruits, vegetables, milk, toiletries, etc.

  • These businesses promote client convenience by bringing things to their doorsteps.

  • They have low inventory due to frequent relocations.


  • Peddlers and Hawkers

Hawkers and peddlers are among the world's oldest retailers. They transport their stuff via bicycle, hand cart, basket, etc. 

They set up shop in markets and on streets. So they travel to contact as many clients as possible. Hawkers don't usually offer branded goods, but rather non-standardized everyday items. 

  • Cheap Jacks

Unlike hawkers, cheap jacks have a shop, but it is temporary. They move these temporary shops if better possibilities arise elsewhere. 

  • Market Traders

These are small shops that only open on market days. So if the market is only open Mondays and Wednesdays, they only trade then. 

They usually specialise in one product line. These stores' major consumers are low-income or bulk buyers (but still for personal use).

  • Street Traders

Street traders are sometimes known as pavement sellers. They set their shop on streets near schools, cinemas, train stations, etc. and sell everyday items. Eg. Newspaper seller, food item seller etc.

  1. Fixed Shop Retailers

They operate from a fixed location and are self-explanatory. They are permanent structures that do not relocate frequently.


  • Fixed shop retailers often operate on a considerably larger scale, though this varies by store type.

  • They need a lot of cash for merchandise and infrastructure.

  • They also provide a wide range of products and services.

  • Consumers and manufacturers/wholesalers trust these businesses more.


  • General Stores

General stores are the most common in India. They stock everything from crackers and grains to toothpaste and shampoos. They are positioned in a market where clients may easily access them. To promote convenience, these establishments sometimes offer home delivery and credit options.

  • Speciality Stores

Stores that specialise in one product category, such as women's clothing, technology, or cosmetics. They exclusively sell things from one category. Vijay Sales exclusively sells electronics. These shops are frequently located in cities. They set up shop in a busy area, like a mall, to maximise foot traffic.

  • Secondhand Products Store

They sell used goods. Some of these used things are rare books or furniture or even cars. Their products are sourced differently than typical merchants, although they are still considered retail. 

  • Street Stallholders

These vendors have permanent stalls put up on the street. They don't move their stalls often. Their shops are small, thus they can't hold much stuff. They also deal in everyday products like clothing, stationery, and tobacco.

FAQs on Types of Retailing Trade

1. Explain the Characteristics of Fixed Shops?

The characteristics of fixed shops are,

  • The scale of industry might be either medium or large scale.

  • They require more investment from itinerant retailers. Because they need to invest further stock, place as well as infrastructure.

  • They don't move their shop from one place to another.

  • These people can provide a large variety of products at various ranges of costs.

  • These shops need to gain a Goodwill from both the wholesalers as well as consumers.

2. What are the Types of Fixed Shops?

As we know that fixing shops may be either a large scale business or a medium scale business. So each has separate types of stores. So the classification is as follows,

Large scale

  • Departmental stores

  • Shopping malls

  • Mail-order house

  • Supermarkets

  • Consumer cooperative stores

  • Shopping complexes

  • Industries etc

Medium / Small scale

  • Stallholders

  • General stores

  • Speciality stores

  • Single line stores etc for example medical shops, textile shops, stationery, etc.

3. What are the Functions of Retail Trading?

As retail trading plays a significant role in the Indian economy, it is important to have a look at the functions of retail trading. Even though it is a small kind of business activity, it involves several functions. They are,

  • Collecting and assembling all kinds of goods from various wholesalers and distributors.

  • The retailers need to explain and provide proper information and awareness of that particular product to make the customer willing to purchase.

  • The stock can be more from one place to another place. That is transportation also done by the retailers either from a wholesaler or to the consumer if he provides a bulk order.

  • The retailer also needs to segregate his stock based on the manufacturer, quality, price. Then only he can fix a certain percentage of margin as it differs from one product to another.

  • Retailers should give an eye on their investment also either to expand the business or to increase their profit level.

  • Retailers should need to be attentive to products having less expiry date.

4. What is a Business and state its 3 key features?

Business is an economic activity that entails the exchange, purchase, sale, or creation of goods and services to make a profit and meet client needs. Businesses can be for-profit or non-profit organisations to make money or achieve a social goal.

  • The attainment of social and emotional goals is unimportant to business.

  • The raw material is converted into final goods by the business enterprise.

  • To earn value, every business transaction involves the exchange or transfer of services and goods.

5. What is the importance of a Retailer?

Importance of retailer is:

  • Supermarkets or small Kirana shops sell various products made by various companies. Customers can choose from a wide range of goods, sizes, brands, and pricing all in one spot.

  • Wholesalers and manufacturers offer bulk to retailers. Retailers resell it to clients in smaller, more practical amounts. This bulk order breaking into smaller amounts helps to meet client demands.

  • The retailer's major task is to keep things in stock so customers can buy things in modest quantities.

  • Retailers provide services that help customers shop. For example, shops display all products for customers to see and buy. 

6. How can Retailers be classified and categorised?

The ownership structure is one approach to classify retailers. The retail industry has five primary ownership types:

  • Corporate chain
    Corporate chains typically have several locations, centralised ownership, and uniform execution requirements. Some national retailers run their outlets under multiple regional banners.

  • Independent
    Independent stores, as the name implies, are owned and run by self-employed people. Owners may have many locations and operate similarly, but they may not reap the benefits of large-scale operations.

  • Wholesaler
    Wholesalers are product distributors who are mostly concerned with supply chain and logistics. However, as part of franchise agreements, some wholesalers operate stores and/or licence their store brands to independent stores.

  • Franchise
    Individual business owners who have contracted with a larger corporation operate franchise stores, whereas corporate chains are owned centrally.

  • Co-op
    Co-ops form when multiple independent retailers pool their purchasing power. They gain purchasing power and maybe reduced costs from manufacturers and growers.

7. What has changed since 2010 in Retail Experiences?

Consumers now have more power than ever before thanks to technology. Brands have been compelled to pay attention to what customers want from their experience to remain competitive. 

These expectations include delivery and service. Consumers want shops to offer faster and cheaper shipping alternatives, as well as easy product search and purchase.

Experts think ‘instantaneous delivery' to be the new norm by 2021. 10 years ago, customers had little authority. Today, internet reviews and ratings may make or break a product or brand, putting the power in the hands of buyers.

8. What are the factors that have contributed to the growth of organised retailing?

The following are some of the elements that have contributed to the growth of organised retailing:

  • India's middle class is rapidly expanding. Rising customer demand and disposable income have allowed the retail business to thrive.

  • Today's urban women are educated. Working women have no spare time and expect everything under one roof. They want convenience. Modern retail stores thus offer one-stop shopping.

  • Organised retail deals in bulk and benefits from large-scale production and delivery. They cut out middlemen in the supply chain.

  • Rural India now faces tough competition in the retail industry. Rural India is rapidly growing as rural consumers become more quality aware.

  • Big business tycoons like Tata, Birla, and Reliance have joined retail. They may deliver great goods and services.

  • The Indian retail sector is attracting overseas retailers. International companies have entered our country via joint ventures and franchising. This also helps organised retailing.

  • One of the driving forces behind the expansion of organised retail is technology.

  • Indians are now more exposed to foreign lifestyles. Their standards for quality have risen, as have their demands for more choice, value, and convenience.

  • With the rise of consumerism comes a more savvy and demanding customer.