A retailer is a term that is likely familiar to anyone involved in business. However, for those unfamiliar, it’s easy to assume that a retailer simply refers to a supermarket selling various everyday products.
So, is a retailer really just a supermarket selling everyday goods? To clarify, take a look at this overview of retailers, covering their definition, types, and key functions.
What Is a Retailer?
Simply put, a retailer is an individual or business entity that interacts directly with consumers. Retailers conduct business by selling products or services to customers, either through online or offline stores.
The retail business model typically starts with the producer, who designs and manufactures the products or goods. This party is usually a company operating in the manufacturing sector.
Next, the retailer purchases products or services from the producer either directly or through a wholesaler at a special price and then sells them to consumers at the retail price.
The retail price itself can vary, typically ranging from 10% to 50% higher than the price offered by the producer. This price difference represents the retailer’s profit.
So, what is the difference between a retailer and a wholesaler?
Besides retailers, you’ve probably come across the term wholesaler. In Indonesian, a wholesaler is known as a penjual grosir. So, what exactly distinguishes a retailer from a wholesaler?
The main difference between a wholesaler and a retailer lies in their roles within the distribution process. Typically, producers first sell their products or goods in bulk to wholesalers.
Afterward, wholesalers offer or sell the products to retailers, who then sell them to consumers. Other differences between the two can be seen in several aspects:
- Capital: Wholesalers require larger capital compared to retailers, as they need to purchase products from producers in bulk quantities.
- The profit margin The profits earned by wholesalers are generally smaller compared to those of retailers.
- Coverage Area: However, wholesalers typically have a larger coverage area. In a single region or city, a wholesaler can supply products to multiple retailers.
Types of Retailers
In practice, within the trade and business sector, there are several common types of retailers, including:
1. Based on the Type of Products or Goods Sold
This type of retailer can be further divided into several forms: retailers that specialize in selling products, retailers that specifically offer services, and retailers that use specialized media to market and sell their products.
2. Based on Its Purpose or Use
From the perspective of purpose or ownership, retailers can also be divided into three types: independent retailers, franchise retailers, and retailers operating as part of a business group.
As the name suggests, independent retailers operate on their own without external involvement. In contrast, franchise retailers operate under a business franchise model, where operations involve the parent company and its franchisees to promote similar products.
Meanwhile, retailers operating as part of a business group are a network of retailers that are interconnected and operate under a single management structure.
3. Based on the Selling Method
Finally, retailers can also be classified based on how they sell products. This type is divided into two categories: retailers with direct access to customers, and retailers that are part of a larger group, forming shopping or business centers.
Functions of a Retailer
Retailers actually serve several important functions that make them key players in the business sector, including:
1. Facilitating Consumers in Accessing Products and Services
The presence of retailers helps consumers easily obtain the products and services they need. Conversely, without retailers, consumers would find it more difficult to access desired goods, as they would have to purchase directly from the producers.
2. Providing Benefits to Producers and Wholesalers
In addition to making it easier for consumers to obtain the products and services they need, retailers also provide benefits to producers and wholesalers. These benefits come in the form of sales profits and additional revenue.
3. Selling a Variety of Products at Different Prices
Often, retailers purchase large stocks of goods from multiple producers, which results in price variations. This diversity creates a varied market and ultimately enhances consumer satisfaction.
4. Participating in Product Promotion
A retailer who has purchased products from a producer will naturally market those products to potential consumers. In practice, they implement appropriate promotional strategies, which indirectly helps increase the popularity of the products or services introduced by the producer.
In short, a retailer is a seller who purchases products from producers and resells them to consumers at varied prices. Retailers make it easier for consumers to access the products they want while also providing profits for producers and wholesalers.
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