In the process of acting as a link between the wholesaler (or the manufacturer) and the consumer, a retailer performs many functions:

1. Buying and Assembling:

It has been said that a retailer stocks wide variety of products to meet the requirements of a large number of customers. For this purpose, the retailer has to assemble products of different manufacturers from different wholesalers through the process of buying. In buying these products he has to be cautious. He has to find out the best and cheapest source of supply. Then he has to select only such of the goods offered which would suit the need of his customers. He must purchase only in quantities enough to meet the demands of his customers.

2. Warehousing and storing:


Products thus assembled have to be stored by the retailer so that they are held in reserve stocks out of which consumers requirements are met without any interruption by selling in small quantities.

3. Selling:

The ultimate purpose of retailing business is to sell these products to the consumers. Though a retailer is sometimes referred to as buying agent of consumers, producers and manufacturers regard retailer as a means of dispersing goods to the market and drawing income into their hands so that they can continue their business of production.

4. Assumption of Risk:


The retailer has to bear the risk of physical deterioration of goods and fall in value. A retailer has to stock goods in anticipation of demand from his customers. This stock must always be sufficient to meet any demand from the customers. This fact involves risk to the extent of the stocks held by any retailer. Firstly, the products stored are subject to the usual risks of flood and other natural calamities. Secondly, there are the risks of flood and other natural calamities. Secondly, there are the risks of spoilage and deterioration due to the very nature of goods. Then there is the risk of change in fashion. Fickle mindedness of the consumers and human tendency to like change in life together make loss of value through change in style and fashion – a very real risk to a retail trader.

5. Grading and Packing:

Retailers have to sort out in different lots goods or products left ungraded by the producer or the wholesaler. Also, they must make arrangements for proper packing of goods which are sold loose.

6. Financing:


Often retailers have to grant credit to consumers. Credit sale in effect means facilitating the flow of products through the marketing channel to its ultimate goal. Thus retailers contribute in financing the marketing process.

7. Supply of Market Information:

Retailers, being in touch with the consumers, are most favourably situated to study consumers’ ehavior, changes in the tastes, fashions and demand etc. Thus they collect valuable information pertaining to the problems of marketing.

8. Advertising:


Retailers display goods in their stores.