Aviva Directory » Business & Industry » Retail

Retail refers to the sale of goods to consumers for their use. Retail stands in contrast to wholesale, which is the sale to business or institutional customers.

Retailers purchase goods in large quantities, either directly from a manufacturer or through a wholesaler, and then sell it in smaller quantities to consumers at a profit.

The retail industry is huge, and may be represented by a local grocery store or gift shop, a large shopping mall, a catalog, or an Internet shopping site.

Retail pertains to the business of selling services directly to end-users or consumers. While some retail businesses might sell to business customers, these sales are known as non-retail activity. In some jurisdictions, at least eighty percent of sales activity must be to end-users in order for the business to qualify as a retail business.

Retailing generally occurs in retail stores or online, but it can also take place through door-to-door sales, vending machines, roadside stands, or farmer's markets.

Common practices in the retail industry are to attract customers through product displays, advertising, and marketing techniques. Some retailers advertise their stores as wholesale outlets offering wholesale prices, but a store that sells the majority of its products directly to consumers is a retailer. Calling the store a wholesale outlet is often done simply to persuade customers that they are getting a lower price than they would from a retailer.

The four major categories of retail businesses include hardlines, soft goods, food, and art. Hardlines are products that are designed to last a long time, such as automobiles, furniture, and appliances. Soft goods (consumables) include clothing, shoes, toiletries, and so on. Food, of course, includes things like meat, product, and baked goods, while art would include items like fine art, books, and musical instruments.

Retail stores include mom-and-pop stores, discount stores, grocery stores, liquor stores, department stores, shopping malls and big-box stores, warehouse stores, and online retailers. Although they may sell some retail products, bars, restaurants, and other businesses selling prepared foods and drinks are not generally considered retail stores.

While retailers sometimes purchase sale goods directly from manufacturers, they most often obtain their stock from wholesalers or distributors. In such cases, when the product goes from the manufacturer to the distributor, and then to the retailer, there is a markup at each step of the chain. For example, if a product costs $1 to be made, it might be sold to the wholesaler for $2, who might sell it to the retailer for $3, and the retailer offers it for sale to end-users for $4. Each of these for-profit businesses has to make money in order to stay in business.

Large retailers, like Walmart, Amazon, and Costco, are big enough to deal directly with manufacturers because they purchase in large quantities and have their own shipping and storage facilities. Because they are able to leave out the intermediary, they can often price their goods lower than other retailers. Similarly, grocery stores that are affiliated with a larger chain can acquire goods at better prices than independent stores.

Globally, as of 2020, the ten largest retailers were Walmart, Amazon, Costco, Schwarz Gruppe, Home Depot, Kroger, Walgreens, Aldi, JD, and Target.

Topics related to the retail industry, as a whole, are appropriate for this category, although the larger retailers, particularly those with an international presence, may also be listed here. Most shopping sites should be in our Shopping & eCommerce category and/or in the Local & Global category that corresponds to the store's geographical location.

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