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Chapter: 11th Commerce : Channels of Distribution

Characteristics and Function of Retailers

Retailer generally involves dealing in a variety of items.

Characteristics of Retailers

Following are the characteristics of retail traders

1.        Retailer generally involves  dealing  in a variety of items. A retailer makes purchases from producers or wholesalers in bulk for sale to the end consumers in small quantities.

2.        Retail trade is normally carried on in or near the main market area.

3.        Generally, retailers involve buying on credit from wholesalers and selling for cash to consumers.

4.        A retailer has indirect relation with the manufacturer (through wholesalers) but a direct link with the consumers.


 

Function of Retailers

1.        Buying: A retailer buys a wide variety of goods from different  wholesalers  after  estimating  customer’s   demand. He selects the best merchandise from each wholesaler and brings all the goods under one roof. So, he performs the twin functions of buying and assembling of goods.

2.        Storage: A retailer maintains a ready stock of goods and displays them in the shop.

3.        Selling: The retailer sells the goods in small quantities according to the demand taste and preference of consumers. He employs efficient methods of selling to increase his sales turnover.

4.        Grading and Packing: The retailer grades the goods which are not graded by  manufacturers  and   wholesalers. He packs goods in small lots for the convenience of consumers

5.        Risk-bearing: A retailer always keeps stock of goods in anticipation of demand and bears the risk of loss due to fire, theft, spoilage, price fluctuations, etc.

6.        Transportation: Retailers often carry goods from manufacturers to  their retail outlets.

7.        Financing: Some retailers grant credit facilities to his customers and provide the facility of return or exchange of goods. Door delivery and after sale service are provided by retailers

 

Services Rendered by Retailers

The following are the services rendered by the retailers.

 

Services to Manufacturers and Wholesalers

Retailers provide the following services to manufacturers and wholesalers.

1.        Help in Distribution: Retailers relieve the manufacturers and wholesalers of the burden of collecting and executing  a large number of small orders from various consumers.

2.        Market Information: Retailer supply valuable information to wholesalers about changes in tastes, preferences, fashion etc. of consumers

3.        Large Scale Operation: The manufacturers and wholesalers are freed from the trouble of making individual sales to consumers in small quantities. This enables them to operate on, at relatively large scale and thereby fully concentrate on their other activities

4.        Help in Promotion: Retailers participate in the promotional activities carried by manufacturers and wholesalers such as short time offers, coupons, free gifts, sales contests, etc. Retailers help in promoting the sale of the products.

5.        Personal Attention: The retailer is able to provide more personal attention to  his customers than the wholesaler is, He gives special services on the spot when the articles require minor repairs.

 

Services to Consumers

A retailer provides the following services to consumers.

1.        Regular Supply of Goods: Retailers maintain a ready stock of various products of  different  manufacturers  for sale to consumers. This enables the buyers to buy products as and when needed.

2.        New Products Information: The retailers provide important information about the new arrival of products through their personal. Selling efforts and effective display of products.

3.        Credit Facilities: Sometimes retailers provide credit facilities to their customers and enable them to increase their level of consumption.

4.        Wide Selection: Retailers generally keep stock of a variety of products of different manufacturers. This enables the consumers to make their choice out of a wide selection of goods.

5.        Miscellaneous Services

·           Retailers provide free door delivery services to the customers.

·           They provide after sale service to customers.

·           They allow cash discounts on their sales.

 

Services to the Government

1. Payment of Taxes

Retailers collect General Service Taxes and pay it to the Government which leads to increase in national income.

2. Helps in Improve the Standard of Living

Retailers help the society to improve the standard of living of people and contribute to economic development of a country.

3. Implementation of Government Policies and Acts

Retailers implement the government policies and enforcing the acts such as prohibition of tobacco products, prohibition of child labour, prohibition of adulteration considering common interest.

 

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11th Commerce : Channels of Distribution : Characteristics and Function of Retailers |


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