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What are the different types of retail business structures?

The retail industry is gigantic. From department stores to vending machines to online retailers, the diversity of retail businesses is one of the driving forces that has made it successful. Let’s delve a little deeper into the various types of retail structures and how they work.

1. Department Stores

Department stores are known for their vast range of product offerings. They often present a mix of different merchandise and can include anything from clothing to make-up and kitchenware. These items are typically presented in categorised sections within the store, each with their own department manager. Some department stores may focus on more high-end brands, while some may be more affordable.

2. Supermarkets

The birth of the supermarket occurred around the 1920’s, making shopping easier with typical grocery items all under the one roof. Many supermarkets have self-checkout facilities installed.

3. Discount Stores

As the name suggests, discount retailers focus on offering products at a cheaper price. The variety of products available to purchase are often limited and can frequently change depending on availability. Discount stores are typically large in size and minimal in their design, with standard merchandise sold at lower margins and higher volume.

4. Warehouse Retailers

These are the bare-bones, no-frills, retail set-ups where items are generally much cheaper than other retailers. Costco is a prime example of a warehouse retailer that provides a wide variety of items, often sold in bulk for a discounted price.

5. Franchise retail opportunities

The franchise retailer structure involves a national brand that offers business opportunities for people to own locally based branches. The process involves a business owner (franchisee) purchasing a franchise which allows them the right to use the franchisor’s business model and brand for a certain period of time.

Training and on-going support is provided to help the owner build, grow and manage their local business. Some examples of retail franchise businesses within Australia include Subway, Coffee Club and Mad Mex.

6. Online Retailers

One of the more modern kinds of retail structures, the world of online retailing is growing rapidly. Amazon is one of the first online retailers who have been providing customers with the option to select their products online and have them delivered straight to their home or office.

Because there is no physical store for customers to visit, online marketing plays a big role in managing and driving business. The scale and size of an online business can vary greatly from home-based businesses selling items on eBay to global giants like Alibaba.

6. Non-store retail businesses

The non-store retailer structure offers an opportunity for retail businesses to really get creative with their approach to the market. These are a few examples of non-store retailing that you are probably already familiar with:

  • Direct Sales– one of the oldest methods of selling is the door-to-door salesman. Making cold calls to homes and offices, the salesman provides information about the business’ products and services.
  • Vending machines– these days vending machines are more than just soft drinks and chips. It’s not uncommon to now find items like make-up, mobile phone chargers and even thongs available for purchase.

Thinking about opening your own retail business? Before you start trading, make sure you have your business insurance sorted. BizCover makes it easy to compare and purchase business insurance online with no paperwork required. Visit our website or give us a call today.

 

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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