Retail

Business, Legal & Accounting Glossary

Definition: Retail



Full Definition of Retail


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 centre 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).

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.

For details on the various types of retailers see:

  • Army-navy_stores
  • Bookstore
  • Convenience store
  • Department store
  • Dollar store
  • Electronic commerce, B2C
    Online shops have both advantages and disadvantages over traditional off-line retailers. One of the advantages is the vast collection of goods that can be sold at the site. In the case of selling goods like books and wine bottles, this is a significant advantage.
  • Hardware store
  • Hobby store
  • Mail order
  • Pet store
  • Pharmacy
  • Sex shop
  • Supermarket, grocery – food and commodities
  • Surplus store
  • Thrift store
  • Travel agency

Retail pricing

The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailer’s 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. $ 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. Alternatively, there is price discrimination (a customer has to pay more if the seller assumes that he or she is willing to do that due to wealth, carelessness or eagerness to buy) and possibly a bargaining situation. It is a “fight” about how the total surplus is divided into consumer and producer surplus, with for both parties the “threat” that there is no surplus at all because the sale is off.


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Definition Sources


Definitions for Retail are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th February, 2020 | 21 Views.