What is a Retailer? How Retailers Work?


A retailer is defined as a person who establishes a distribution channel and then acts as an intermediary between the producer or supplier of the goods, and the consumer of the goods as a result of that distribution channel.

Also referred to as a merchant, it can be seen that retailers use either one distribution channel or a combination of several different channels in order to earn a profit. This can either be online or via some typical brick-and-mortar store.

Retailing can hence be described as a process that is mainly about distribution in which all the activities are constituted in selling the stated goods and services directly to the final consumer.

Retailers mostly buy considerable quantities from the buyer or some other wholesale distributor, and then resell them to the general public or the direct consumer of those particular goods.

Because of the fact that retailers typically purchase goods in considerable quantities, they often get them at much-discounted rates, and the difference between the cost of their procurement, and the final retail selling price, is considered to be their profit.

In this regard, it becomes essential to highlight the difference between the wholesaler and a retailer such that the wholesaler generally provides goods in bulk quantities to other businesses, whereas a retailer mostly sells them to direct consumers.

How Retailers Work?

Retailers mostly sell directly to consumers in some form or another. Therefore, they need to set up their distribution channels that are in relatively closer proximity to the direct customers or their market.

In this regard, it is quite important to ensure that modern retailers are able to make their strategic decisions based on the type of the store, the market served, the required product assortment, customer service protocols, as well as market positioning.

After taking these factors into consideration, retailers set up their channels in order to directly reach their customers in a structured manner that is profitable, as well as sustainable for them.

Examples and Types of Retailers

Retailing tends to be quite an expansive field in itself and therefore, it can cover a wide variety of goods and services in this aspect.

However, there are different types of retailers that exist, based on the type of business they’re in, and the service they are providing to their customers. The different types of retailers are mentioned below:

Brick and Mortar Retailers

Brick and Mortar Retailers are perhaps the most common kind of retailers. This basically includes shops that have a physical location that can enable them to sell goods and services over the counter to their customers.

Despite the fact that they vary in size, yet it can be seen that they are mostly involved in purchasing goods and services directly from the supplier or the manufacturer, keeping their reasonable share of profit, and then passing it on to the customers.

Online Retailers

Online retailing, also referred to as e-tailing, is considered to be one of the most popular sources of retailing. It has increased in traction also because of the fact that there is an increasingly growing chunk of the population that prefers purchasing goods from the comfort of their homes.

Online stores are different from brick and mortar because they do not have a physical presence. Apart from this difference, they function in the same manner as traditional brick-and-mortar retailers do.

An exception to these two most common types of retailing, there are several other kinds of retailing that are also widely popular. They include KIOSKS and other Pop-up Stores.

Another major kind of retailing is considered to be non-store retailing, which includes direct marketing, direct selling, automatic vending, as well as buying service.


Retailing is considered to be a very important part of the economy because of the fact that it marginally helps producers and suppliers form a link with the consumers of these goods. Therefore, the role of retailers from an economic perspective cannot be undermined.

However, the recent past has seen increasing competition in the retailing industry which speaks volumes of how it can be considered as one of the most rapidly growing industries across the globe.

Retailers, however, need to comply with certain rules and regulations based on their location. These standards are set to ensure that they are able to provide top-notch services to their clients, and effectively manage the distribution of goods and services without exploiting the rights of any concerned parties.

The GS1 Retail Industry Standards is one such example of how retailers can use this as a blueprint to ensure efficient functioning across all their processes.