What is Retail?

Retail often refers to small businesses or domestic trades. Shops, road stalls, small shops are examples of retail work. These are the last link in the delivery cable since they focus on selling the finished product to the final customer.

When we talk about goods, we must elucidate that we mention manufactured products and are finished. That is, we are not speaking about raw materials.

In short, we are talking about the commercial that is in direct contact with the customer.

Features of Retail

Features of Retail

The main topographies of the store stay:

  • It is lone that is in direct contact with the patron.
  • Purchase your products wholesale.
  • They are the last link in the deliverable and the previous but the value chain.
  • They operate in small quantities.
  • Retail trade integrates all person stores and small family businesses that operate in the economy.

Importance of Retail

You should know that the activity of the retail market is of significant impact on any economy. This is so by specifying the transfer of goods or products to consumers or end-users and being, until now, the most common way of fixing this last phase of the marketing chain.

It also usually provides relevant indicators in specific sectors of the economy.  For example, it is scarce in those where the most significant number of trade operations of particular products is concentrated. A population that consumes more speaks of a better satisfaction of needs. And, therefore, a better distribution of wealth.

The challenges of the retail market force it to search for new and better ways to transport, store, offer, and promote its products.

This, in turn, invigorates various sectors of commerce such as advertising, design, marketing, administration, and others that can offer new schemes and sales models that adapt to new challenges, specifically through Internet commerce. In short, this is the future of retail as it is the most accessible and most convenient purchase option for the end-user.

Differences Between Wholesale and Retail

Wholesale trade is a process that occurs in the intermediate phase of the marketing chain. However, it is not intended to bring the products or services to the final consumer.

To reach retailers as a final product and identify specific names, brands, and registrations. We must place the wholesale agent as an intermediary between the producer or manufacturer and the retailer. Here the good or product is frequently classifies, group, package and label.

The distribution of significant goods or services is voluminous and sometimes complicate. It may involve moving products on a large scale over very long distances or even from one country to another.

In addition, they must comply with a series of general requirements and standards. These guidelines may be different depending on current legislation and trading conditions. And that they are not only in the characteristics of the goods or products that treat. Also, in the form and quantity in which they mobilize or intend to introduce to a particular place.

Types of Retailers

Based on some criteria, the retailer can be one category or another. In this case, we process to classify the types of distributors and retailers bases on two core criteria: the organization of the company and its form of sale.

Based on its organization, we can classify retail into five kinds:

  • Independent commerce: Typical store or establishment of small dimensions dedicate to the sale.
  • Associated/integrated commerce: These are independent businesses, but they are inside large areas. The best example is shopping malls.
  • Large distribution: Large wholesale companies that operate as retailers. Very common in supermarkets.
  • Franchise: independent Store and part of a network of stores that follow the same criteria while often offering similar products.

On the other hand, based on their form of sale, we can classify the retail distributor into four types:

  1. Traditional trade has three main elements: counter, seller, and warehouse.
  2. Self-service transaction: It is the consumer who is dispatched.
  3. Mixed commerce: Where the self-service is presented, but when it comes to charging, there is a person in charge of collecting and receiving the sale.
  4. Sale without commercial establishment: Sale made through street selling, online sales ( e-commerce ), automatic sales (vending machines), distance sales, or by catalogue.

Commerce of Retail

The regulations that regulate trade at the state and regional level define retail trade as one whose commercial activity carries out professionally for profit to sell any class of articles to their final recipients, consumers, using or not an establishment.

Commercial activity

The regulations that regulate Commerce at the state and regional level define what is understood by commercial activity. And within this, they distinguish the retail, commercial activity from the wholesale one.

Madrid’s community

Thus, in the Community of Madrid, commercial activity define as:

Commercial activity is understood to be that consists of placing or offering on the market, on its account or for third parties, natural process products, as well as those services derive from it, regardless of the modality or support use for its realization, and whether carry out wholesale or retail trade.

Commercial activity carries out under the principle of free enterprise and within the market economy framework, following the provisions of article 38 of the Constitution and the laws.

Retail Commercial Activity

For its part, the retail, commercial activity carries out professionally for profit consisting of offering the sale of any class of articles to their final recipients, the consumers, using an establishment or not.

In Madrid, it is define as follows:

  • The commercial activity of a retail nature, for this Law, understand to be that which has the final consumer as its recipient.
  • Castilla-La Mancha is defined similarly, emphasizing agricultural cooperatives that sell to their members.
  • Retail, commercial activity is consider to be carries out professionally for profit consisting of offering the sale of any items to their final recipients,  whether or not using an establishment.
  • Sales to the public by cooperative entities or other analogous legal forms, in cases in which it authorizes by current legislation on the matter. It will carries out in a conveniently differentiated manner concerning the operations carried out with the partners.
  • Taking into account the place of distribution, the identification of the products and other conditions of the transaction, without the discriminatory offer to the cooperating partners.
  • The general public of the developments obtain by the entity and of the items acquired from third parties being able to occur simultaneously

According to Andalusian Regulations, the Commercial Activity of a Retail Nature

the professional exercise of acquiring products for resale to the final consumer. In other words, it is a retailer that develops products (from professional wholesalers ) for resale to final consumers.

According to this same rule, they do not have the status of commercial activities of a retail nature:

  1. a) The sale by manufacturers, within the industrial premises itself, of the waste and by-products obtained in the production process.
  2. b) The direct sale by farmers and ranchers of agricultural products in their natural state and their place of production or cooperative collection central for such production.
  3. c) The sale made by artisans of their products in their workshop.

Retail Requirements

For a retail business to legally engage in a company, all of these conditions must be met a professional activity for profit:

  • An offer of articles to final consumers.
  • A sales channel is not necessarily a physical establishment.
  • Regulations that regulate retail trade
  • The state regulations on which the CCAA are base to legislate their internal trade laws is Law 7/1996 on retail trade.
  • Legislative Decree 1/2012, of March 20, approving the Andalusian Internal Trade Law ( BOJA of March 30, 2012 ).
  • Law 2/2010, of May 13, on Trade in Castilla-La Mancha ( DOCM of May 21, 2010 ).
  • Law 16/1999, of April 29, on Internal Trade of the Community of Madrid.
  • And also, law 7/1996, of January 15, on the Regulation of Retail Trade.


It is the economic activity through which product distributors deliver specific goods and products to consumers or end-users through various marketing channels and international business.

Generally, the retail distributor acquires more or less abundant quantities of certain goods or products. And its purpose is to transfer them to people who them. In most capitalist systems, this does through a commercial operation. Its calling “buying and selling” in most capitalist systems.

This commercialization stage can development in diverse ways that are even innovate as new market technologies advance. We are talking, for example, about selling over the counter in physical places such as stores. Trade through magazines and catalogues, electronic commerce and other forms of sale. And that, despite being diverse, they still have the same objective: to ensure that the products reach the consumer or end-user.

Also Read: What is Finance? – Characteristics, Types, and More

Review What is Retail? – Features, Important, and More.

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