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Retailers buy products from wholesalers, agents, or distributors and then sell them to consumers. Retailers vary by the types of products they sell, their sizes, the prices they charge, the level of service they provide consumers, and the convenience or speed they offer.
You are familiar with many of these types of retailers because you have purchased products from them. We mentioned Nike and Apple as examples of companies that make and sell products directly to consumers, but in reality, Nike and Apple contract manufacturing to other companies. They may design the products, but they actually buy the finished goods from others.
Developed countries advertise for the low-income community to buy their products at compatible prices. They also sell goods to developing countries because they are affordable. They are supposed to promote the economic growth of the country from where they buy their raw materials as they invest their money overseas in building industries to produce cheap goods.
The cost of sales isn’t what you pay salespeople or for advertising. It’s the amount you pay to buy what you sell. This is usually easy to understand. In any retail store, for example, the cost of goods sold is what the store pays for the products it sells. In service businesses, the costs of sales can be less obvious, but it can still be figured out.
Merchandising is a bit more complex in that it is an activity but it also is a strategy of how to get people to buy products. It is not only what a company does to make money (sell merchandise), but how they go about doing it (marketing those goods). For example, a grocery store’s primary goal is to sell their merchandise, lots of different types of food products and household essentials, to their customers. However, the in-house marketing and sales techniques that they use to increase sales of particular items are the strategy component of merchandising. Some methods the store might use include:
The progression of shipping has allowed companies to sell more of their products because it helps them distribute their products to customers who aren’t close to a store that sells the merchandise. 34 percent of all shoppers prefer to buy their commodities on the Internet and through online shopping, and 80 percent of online buyers were motivated to buy through the Internet because of shipping. (Charleton, Graham 34% of Shoppers Prefer to Buy Online: Report) Shipping offers a sense of convenience to some purchasers because it allows them to buy merchandise without going out to help with their busy schedules.
The most countries economy allows individuals to purchase what they want, work where they want, and change jobs when they want. Businesses can make whatever products they wish and sell them at any price. Buyers and sellers can exchange money for products, but no one is forced to buy or sell. People and corporations own property and can buy it, sell it, use it to borrow money or make a profit. People have the right to make a profit. Most businesses operate in competition with other businesses.
