Merchandising Business: Definition & Examples

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Lesson Transcript
Instructor: Tara Schofield
This lesson explores the exciting world of merchandising businesses. Merchandising businesses are explained and many examples of merchandisers are provided.

What Is a Merchandising Business?

A merchandising business, sometimes called merchandisers, is one of the most common types of businesses we interact with daily. It is a business that purchases finished products and resells them to consumers. Think of the last time you went shopping for food, household items, or personal supplies. You were likely in a merchandising business. That store had purchased the items wholesale from a distributor or a manufacturer and made it available to you. While the store may have been required to purchase in large quantities, they offer the product to you in a small, personal-use size.

For instance, a wholesaler may offer deodorant to a merchandising business at a large discount, but they will likely require the store to purchase hundreds, even thousands, of units to qualify for a discount. The store then offers the deodorant to you at the retail price and allows you to purchase one container. The difference in the amount you paid the store and the store paid the wholesaler is the store's profit. The profit allows the store to stay in business and offer you products in the future.

Companies who provide services are not considered merchandising businesses, unless they offer merchandise as part of their service. For instance, if you go to a tanning salon, the tanning session is considered a service. However, if the salon offers tanning lotions, creams, and tanning enhancers, it could be considered a merchandising business because it has products available for you to purchase.

Examples

There are virtually thousands of examples of merchandising businesses. Some of the most recognizable stores that are merchandising businesses include: Wal-Mart, Target, Dillard's, Macy's, JCPenney, Kohl's, Michaels Crafts, Lowe's, Home Depot, and Toys R Us.

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