What Is Retail Business and its Types

The name retail is a term that we often hear, both for business people or ordinary people. However, what is a retail business? What are the types and how do you start a retail business?

In general, retail business is a business that we encounter in everyday life. This business has a fairly large market share.

Money+ sums it up for you below:

What is a retail business?

Retail or retail business is the activity of selling products or services to end consumers or buyers directly in small quantities with high prices. Products or services purchased from retail businesses are mostly used for personal consumption or household purposes.

Because the goal is for personal consumption, retail business can be done offline or through physical stores or online or digital stores. The retail business has a very important role in the supply chain from large producers or wholesale stores to consumers who buy in small quantities.

Retail business is a marketing activity that includes all sales activities to direct distribution to final consumers for personal consumption and not for resale.

Business people who carry out this business activity are usually called retailers. Generally, retailers buy goods from producers or suppliers in large quantities to get lower prices. Then process it and resell it to the final consumer in smaller quantities.

Types of retail business

Retail business is divided into 3 types, namely based on the product sold, ownership, and business scale. Check out the explanation below:

Products for sale

  • Service Retailing, retail that offers services or services to consumers. Examples: apartment rentals, car rentals, electronic repairs, to babysitters and tour guides.
  • Product Retailing, a retail business that markets products needed by consumers. Examples: department stores or department stores, supermarkets, minimarkets, food & drug retailers.


  • Independent Retail, a retail business that is run without affiliation or independently. Example: a grocery store or stall.
  • Franchise or franchise, a business run by a franchisee using business management from the standard franchisro company. Example: Kulo Coffee, Soul Promise
  • Retail that already exists, this business is usually a legacy or family business that is passed on to the next generation.
  • Corporate Chain, this type of retail business consists of two or more businesses owned by several individual shareholders and joined in one group. Example: Ramayana Group, Matahari Group

Scale enterprises

  • Large-scale retail, including retailers who sell goods on a large scale. Example: department stores, supermarkets, hypermarkets.
  • Small scale retailer or traditional retailer. This type of retail is further divided into two categories: small-based retailers such as street vendors or permanent kiosks and non-starting small retailers such as traveling merchants.

How to start a retail business

After reading the explanation above, are you interested in starting a retail business? Here are some ways you need to do it:

Determine the business you want to run

As explained above, retail business has many types of business, scale, and ownership. You need to determine this first when you want to start a retail business.

Ask yourself what type of business do you want to run, service or product? Do you want small or large scale? Then, do you want to run yourself, a franchise, or something else?

Have working capital

After thinking carefully about the first point number, then you need to find out how much capital is needed for your retail business.

Do you currently have enough capital? Or you may need to borrow from relatives? Or borrow from a financial institution.

If you choose a small-scale retail business and independent ownership, you can apply for a business loan without collateral, visit NerdWallet to find the best loan for your business.

Prepare marketing strategy

The last and very important step is to prepare a marketing strategy so that your retail business is known by many people so your business will be exposed by many buyers. You can browse this blog, as it provides many strategies to grow your beloved business.

Good luck!

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