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.
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.
Is there a mall or shopping center near your home? It is likely full of stores considered merchandising businesses. Just walk down the center aisle and turn your head to the right and then the left - you will see store after store offering merchandise for sale.
What about your local grocery store? Most grocery stores offer row after row of products you can buy, take home, and either enjoy the items as-is or create delicious dishes from the goods you purchased. It doesn't matter if the store is an independent mom and pop shop or a national chain. Simply offering merchandise puts the store in the merchandising business category.
Merchandising businesses do not have to brick and mortar stores. They can also be online retailers that offer products through their website. Prime examples of online merchandisers include Amazon, eBay, Apple, Best Buy, and Overstock. Each of these websites offer tangible products you can order and have sent to you.
Let's review. Merchandising businesses can offer any type of products, can be independently owned or part of a chain, and can be a physical store or an online business. The differentiating factor is what it offers - whether it provides finished products to consumers or services. Businesses that only offer services are not considered merchandising businesses.