A retail sale occurs when a business sells a product or service to an individual consumer for
his or her own use. The transaction itself can occur through a number of different sales
channels, such as online, in a brick-and-mortar storefront, through direct sales, or direct
mail. The aspect of the sale that qualifies it as a retail transaction is that the end user
is the buyer.
There are an estimated 3.7 million retail establishments in the U.S., from stores to
restaurants to salons to gas stations, pest control providers, and auto mechanics. Those
businesses employ close to 42 million people, making retail the nation’s largest private
sector employer.
The retail supply chain generally consists of four players: manufacturers who produce the goods, wholesalers or distributors who buy from manufacturers and resell to retailers, and retailers who buy from wholesalers and then sell to consumers. At each step in the chain there is a markup, or profit margin, built in to the purchase. Manufacturers calculate their cost of making a product and then add on a profit percentage before selling to wholesalers. Wholesalers do the same thing, adding a profit percentage to what they paid for the products. And retailers add their own profit margin to the cost of the product before selling it to their end customer, the user.
Retailing is the distribution process of a retailer obtaining goods or services and selling
them to customers for use. This process is explained through the supply chain.
To complete a sale, retail stores have traditionally had customers bring their purchases to
a cash register, where a clerk tallies the total cost and rings up the sale. Today, some
supermarkets have self-check-out lanes, where customers can scan their items and check out
using a credit card or cash. Customers buying online shop on their computer screens, click
to select the products they want, and then type in their credit card information to complete
the sale.
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