Retail refers to the sale of products or services directly to end buyers. These are products that we buy on a daily basis in retail stores.
When we talk about retail trade , we are referring to a sector that represents a large percentage of employment in the country. According to data from the National Administrative Department of Statistics (DANE), the number of people employed in this economic sector increased by 2.2% in October 2023 compared to the figures for the same month in 2022.
We are going to explain what retail trade is , its classification, examples of retail companies, how it works and the difference between retail and wholesale.
What is retail trade in Colombia?
The retail market in Colombia is a business model phone database known as retailing, which works as follows: retailers purchase products in large quantities from wholesalers or directly from manufacturers at lower prices and subsequently sell them in small quantities to the general public at higher prices.
Retail trade is , therefore, the direct sale of the product to the final consumer. That is, it is the merchant who buys, for example, 100 units of lipstick and resells them to buyers in smaller quantities.
What is a retailer?
A retailer is a person who sells products to a final consumer, either through a virtual or physical store . In Colombia, we know it as a retailer. The retailer is a businessman who obtains benefits from the sale of items without having to manufacture or produce them; he simply has to sell them to buyers in smaller quantities.
How does retail work?
It works as an intermediary between manufacturers or wholesalers and end consumers. Here is a basic description of how it works:
Product acquisition
Retailers purchase products directly from manufacturers, wholesalers, or authorized distributors. They may purchase merchandise in bulk to take advantage of pricing and a better profit margin .
Storage and management
Unlike dropshipping in Colombia , in retail , once the merchandise has been purchased, the retailer must properly manage the storage of the products received to ensure that they match those ordered from the supplier. At this stage, a lot of order and control is required over the products that must be stored.
Pricing strategy
Pricing strategy may vary depending on a number of factors, such as market competitiveness, value perception, profitability and demand management, among others.
Retail sale
This means having a physical store or an e -commerce site to reach your customers. A significant sales volume helps maintain a constant flow of products and prevents inventory build-up.
Customer service
Providing good customer service is essential. This involves addressing customer queries, resolving issues, and creating a positive shopping experience that fosters loyalty.