Meaning and Nature of Retailing

Retailing is the final and most visible link in the chain of distribution through which goods travel from the producer to the person who actually uses them. A retailer is a trader who buys goods, usually in fairly large quantities from a wholesaler and sometimes directly from a manufacturer or producer, and sells them in small quantities directly to the ultimate consumer for personal use or consumption. Because the retailer is the point of contact the ordinary buyer deals with every day — the neighbourhood grocery, the cloth shop, the medical store, or a large departmental store in a city — retailing is often described as the last mile of trade, the stage that actually places goods in the hands of the people who will use them.

Retail trade should not be confused with wholesale trade. A wholesaler buys in bulk from producers or from other wholesalers and sells in comparatively large lots to retailers, other traders, or industrial users, but rarely, if ever, directly to the final consumer. A retailer, in contrast, buys from the wholesaler (or occasionally straight from the producer, particularly for goods like fresh farm produce, or where a manufacturer wants closer control over how a product reaches the customer) and sells in small units — a single packet, a single garment, a single kilogram — matched to what an individual household or person needs at one time. This difference in the size of the transaction, and in who the buyer on the selling side actually is, is what separates the two stages of the distribution chain.

Retailing exists in an enormous variety of forms across Tamil Nadu and the rest of India — from a single person selling vegetables from a handcart, to a small neighbourhood provision store, to a large multi-storey store selling hundreds of different product lines under one roof. This chapter studies retailing under two broad heads: first, the essential functions every retailer performs regardless of size, and second, the many different types into which retailers are classified — ranging from retailers with no fixed place of business at all, to small fixed-shop retailers, to large-scale, organised retail businesses. This basic idea of a distribution chain running from producer to wholesaler to retailer to consumer is common ground across most Indian commerce curricula — the Tamil Nadu Class 11 Commerce syllabus treats trade and retailing in its own independent way, though a broadly similar treatment of channels of distribution also appears in CBSE Business Studies at a later stage.