Functions performed by a retailer

In a distribution channel retailers play a key role as the link between manufacturers, wholesalers or distributors & the final consumers. Retailers perform various business functions with a motive of adding value to the products & services for the customers.

Providing a large assortment of products & services.

Manufacturers make various types of products or sometimes only certain specific products & sell their entire inventory to few distributors or wholesalers. But the final consumer wants to choose from a variety of goods & services, even if he purchases a limited quantity. Thus a retailers role here becomes very crucial, as he procures a varied assortment of goods & services in large quantities from various sources & offers them in small quantities to the end users. This is called the sorting process.

To reduce transportation cost, manufacturers & wholesalers ship big volumes of merchandise to retailers. Retailers then offer the products in smaller quantities tailored to individual customer’s needs and as per household consumption patterns. This is called Breaking the Bulk.

Holding Inventory – Retailers keep a huge amount of inventory so that products will be available to the consumers whenever they want them. This enables consumers to maintain a low level of inventory. In other words, retailers store products on behalf of the customers and which reduces the storing cost of the customers.

Apart from that retailers provide various services to customers as well as to the manufacturers & traders. Displaying products, providing information about the offerings, gift-wrapping & home delivery are some of the customer services provided by most of the retailers. Manufacturers, distributors & wholesalers get informed about forecasts, customer preferences, brand image, etc. by the feedback from retailers. For small traders, retailers assist in storing, marketing & advertising their products.