From customer point of view, retailers supply the required goods, at affordable price, at the required time, in the required place. Thus, retailer creates time, place and possession utilities. Besides that, in modern retailing, it is the retailer who performs numerous functions for satisfying the needs of the ultimate consumers. Retailer perform various functions like sorting, breaking bulk, holding stock, as a channel of communication, advertising, storage and certain additional services, which are as follows:

1. Sorting

Manufactures usually make one or a variety of products and would like to sell their entire inventory to a few buyers to reduce costs. Final consumer, in contrast prefer a large variety of goods and services to choose from and usually buy them in small quantities. Retailers are able to balance the demands of both sides, by collecting an assortment of goods from different sources, buy them in sufficiently large quantities, and sell them to consumers in small units. This process is referred to as the sorting process.

Through this process, retailers undertake activities and perform functions that add to the value of the products and services sold to the consumer. Supermarkets offer, on an average, 15000 different items from 500 companies. Consumers are able to choose from a wide range of designs, sizes, and brands from just one location. If each manufacturer had a separate store for its own products, consumers would have to visit several stores to complete their shopping.

2. Breaking Bulk

Breaking bulk is another function performed by retailing. The word retailing is derived from the French word retaillie, meaning ‘to cut a piece off’ or ‘to break bulk’. A retailer thus can be a dealer or trader, who sells goods in small quantities. To reduce transportation costs, manufacturers and wholesalers typically ship large cartons of the produce which are then tailored by the retailers into smaller quantities to meet individual consumption needs.

3. Holding Stock

Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an inventory that allows for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacturer to regulate production. Consumers can keep a small stock of products at home as they know that this can be replenished by the retailer and can save on inventory carrying cost.

4. Additional Services

Retailers handle the change in ownership of merchandise by providing services that make it convenient to buy and use products. Providing product guarantees, after-sales service, and dealing with consumer complaints are some of the services that add value to the actual product at the retailers’ end. Retailers also offer credit and hire-purchase facilities to the customers to enable them to buy a product now and pay for it later. Retailers fill orders, promptly process, deliver and install products. Salespeople are also employed by retailers to answer queries and provide additional information about the displayed products. The display itself allows the consumer to see and test products before actual purchase. Retail essentially completes transactions with customers.

5. Channel of Communication

Retailers also act as the channel of communication and information between the suppliers and the consumers. From the advertisements, salespeople, and display, shoppers learn about the characteristics and features of a product or services offered. Manufactures, in their turn, learn of sales forecasts, delivery delays, and consumer complaints. The manufacturer can then modify defective or unsatisfactory merchandise and services.

6. Transport and Advertising Functions

Small manufacturers can use retailers to provide assistance with transport, storage, advertising and prepayment of merchandise. This also works the other way round in case the number of retailers is small. The number of functions performed by a particular retailer has a direct relation to the percentage and volume of sales needed to cover both their costs and profits.