Any form of direct selling in small quantities is called retailing. It is an entrepreneurial activity wherein a retailer simply buys finished goods and sells these goods to customers with a profit. Retail outlets include drug stores, shoe stores, and supermarkets. Stores at the malls and hardware are also retail outlets.
Types of Selling
Different ways have been devised by businessmen by whom customers can pay for the goods they buy. These modes of payment facilitate good relations between customers and entrepreneurs.
Payment schemes used in retail stores are as follows:
Cash Sale. The full amount of goods is paid by a customer infull amount at the time of sale.
Cash on Delivery (COD). This payment scheme is practiced when customers place orders by phone. They payment is given upon delivery of goods in the house or office of the customers. But businessmen must be cautious of prank calls.
Credit Sale. The customer uses a credit card as payment when buying goods. Bank-based credit companies issue credit cards and the cardholder is allowed one month or more to pay for the goods.
Examples of Retailing Activities
1. Repacking. Wholesale goods are packed in smaller quantities for retail selling. The selling of cooking oil by bottles or by plastic in the dry and wet markets and the repacking of salt and sugar and other spices in smaller packs are examples of repacking.
2. Consignment. A trader may leave goods to another trader for the latter tosell on commission basis. Garments, shoes, bags, and cosmetics are the goods usually sold on consignment.
Activities Related to Retailing
The relevance to the needs of its target market determines the success of a retail business. Before starting retailing as an entrepreneurial activity, a businessman should undertake the following activities to make his or her business relevant:
- Identify what commodity the community needs. People buy merchandise they need.
- Buy goods on wholesale basis. These goods are cheaper and can be resold at reasonable prices for a comfortable profit.
- Repack goods for retail sales. Goods are repacked in smaller quantities so consumers can afford to buy them.
- Determine the right prices of goods. Consumers afford fair prices even if these allow reasonable profits for the owners of retail outlets.
- Display the merchandise attractively in sales outlets. Fresh, clean, and attractive goods mean high sales.
- People are convinced to buy merchandise. Businessmen must make people aware of the goods they are selling and convey them the benefits of these goods.