What Are Retailers?
A retailer is an individual or business that directly sells goods to consumers.
Retailers are the intermediaries between wholesalers and consumers. They purchase products in bulk from wholesalers and then sell these products in single units to the consumer.
Types of Retailers
Retailers can be divided into various categories depending on their services and the range of products that they are offering to consumers.
Independent Retailers
An independent retailer is someone who establishes their own business without the help of any established brand (chain store) or franchise. These retailers are solely responsible for their profit or loss.
Chain Stores
Chain stores refer to different store outlets owned by a parent company. These stores are single-handedly run by the parent company.
Some well-known chain stores are:
- Home Depot
- Bed Bath and Beyond
- The Body Shop
- Wal-Mart
Franchise
Franchise refers to different stores owned by separate individuals. These owners sell a company’s products under a license. They need to follow some specific rules and processes passed down by the company. Some examples of franchises are:
- 7 Eleven
- Taco-Bell
- Wendy’s
- Novus Glass
- Papa John’s
Department Stores
A department store sells a wide variety of products at retail prices. Many department stores fall under the category of chain stores.
In a typical department store, you’ll find different sections for food items, clothing, toiletries, jewelry, and kitchenware.
Examples of department stores are:
- Dillard’s
- Macy’s
Supermarkets
Supermarkets are big grocery stores that generally sell food and household items. They usually have a big single floor.
Some common examples of supermarkets are:
- Lidl
- Aldi
- H-E-B
One-Price Shops
One-price shops are quickly gaining popularity among the masses. These shops sell different types of products at a single fixed price.
One-price shops’ products are low priced and have an enormous sales turnover. The retailers carefully choose in-demand products and then buy them in bulk from manufacturers or wholesalers.
Although the price of the product might not be much, the surprisingly low price generates a large amount of sales.
Small-Scale Retail Shops
As the name describes, small-scale retailers are those retail shops that generate small amounts of revenue because of limited capital and few products. The best examples of small-scale retail are:
- General stores
- Street stalls
- Second-hand goods dealers’ shops
Mostly a one-man show, small-scale retail shops do not have a lot of investments and are often run by the proprietor or their family members.
Standards Followed By Retailers
American National Standards Institute (ANSI)
Retailers who are operating in the USA are required to familiarize themselves with ANSI standards. ANSI sets the standards for electronic data exchange among different industries.
For example, Electronic Data Interchange (EDI) is a document standard that allows the retail business to transfer the order information from its website to its warehouse so that the consumer’s order can be processed.
Global Standards 1 (GS1)
GS1 is an international standards organization. Their GS1 barcodes (GS1 GTIN) are widely used by retailers to uniquely identify their products and electronically manage inventory and checkout systems.
How to Become a Retailer in the USA?
It is important to note here that there are some requirements one has to fulfill to become a retailer in the US.
First things first, you have to get an Employer Identification Number (EIN).
Wholesalers, manufacturers, and distributors often ask for this number before starting a business with a retailer.
Simply visit the IRS website and sign up to get an EIN. Fill up an application form. Upon entering the right credentials, you can get your EIN.
You are also required to have a business license.
To check out what documents you need to acquire a business license, you will have to visit your local government agency or office. They will guide you through the process and will update you about the license fee and tax requirements of your state as well.
The Bottom Line
Retailers buy products in bulk from manufacturers or wholesalers and sell them in single units to consumers. They make a profit by selling the single units at a markup.