Types of Retailing Trade

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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.

Types of Retailing Trade

Retailer trading is divided into two categories. But the two categories are again divided into multiple forms. All the divisions can be explained in a detailed manner as shown in the figure.

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The two types are,

  • Itinerant retailers

  • Fixed Shops.

Itinerant Retailers Meaning 

Itinerant means not sticking to one place. That is, moving from one place to another. Itinerant retailers don't have a fixed place to do business. It is like a mobile business centre. They will come and sell their items and move away from that place. They will restart or reopen their shop in another location, and the same procedure will repeat day by day. Along with the itinerant retailer's introduction, we will discuss its features and types.

Features of Itinerant Retailers

To understand more about itinerant retailers, we will see it's characteristics. Some of them are as follows-

  • Usually, these are small scale sector businesses. Because for large sector industries, we cannot move from one place to another.

  • These retailers don't require a lump sum amount of capital. They will invest fewer amounts, especially for the single-day business or for a single season or a month etc.

  • They usually prefer to maintain less stock, so that it is easy for them to transfer from one place to another.

  • They provide more convenience to the customers when compared to large scale industries. Because the customers need to go to the largest scale businesses and need to purchase, but these people can provide doorstep services also.

  • The possibility of updating the stock is very high in these itinerant retailing. According to the customer requirement, they will purchase more variety of items in less number.

  • Fruits, vegetables, dairy products, festival stalls like crackers, rangoli, etc., are the best examples

Types of Itinerant Retailers 

We have four major types of Itinerant retailers. Each can be explained below - 

Street Traders:- 

Pavement vendors is another name. These retailers usually open their shops in busy streets during busy hours to sell newspapers, magazines, food items, beverages, fruits, etc. The places might be like near the movie theatre, schools, railway stations, hospitals, etc.

Market Traders:- 

These retailers will run their business on the specified Market days and areas. For example, if the vegetable market will be opened on Monday and Wednesday in one area, they open on those days only in that area. Next Tuesday and Thursday will be in another area and Friday, and Saturday will be in some other area. The same people and the same business but they keep on moving their shop from one place to another place.

Peddlers and Hawkers:- 

these are the primary type of itinerant retailers. Everyone May know these people. Because these are the ancient retailers in our world. They brought their stock on bicycles, cards, push cards even in the basket also. They keep on shouting their products and provide doorstep services to the consumers. They usually prefer to sell all kinds of items without considering the standard brand and the cost should be less. Fruits, vegetables, clothes, utensils, plastic wear, etc. several daily use products will bring and sell at our doorsteps.

Cheap Jacks:- 

these retailers will do the same process. They open shops and they run businesses for some time, if they find any better opportunity, they simply move on to that business and that place. They don't have stability. These people are completely different from hawkers.

Fixed Shops 

It is the second classification of retail Traders. The fixed shop's name itself explains that they do not move from one place to another. They can establish a medium or a large scale business in a fixed place. They run their transactions from there itself without any change. It also has several types in it.


Thus retail trading is a vast concept that has distinct features and functions. It also takes a significant part in the growth of the economy. So everyone should understand all the types available in it in detail and choose the best fit for one who needs it.

FAQ (Frequently Asked Questions)

1. Explain the Characteristics of Fixed Shops?

Ans. 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?

Ans. 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?

Ans. 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.