Retail business concept

A guru in retail business describes me about the overview of Retail business. So let me share it here. (Please note that most of them might not be the wide-use academic terminology)

At high level, I split out the retail operation into 3 main parts.

1. Buy-in
2. GR (Goods Receiving)
3. Sell

Buyer, a subset of Merchandise unit buy products from vendors. Then do receive the products. Merchandise and Marketing will set the price and promotion of each products. The product with retail price will be ready to sell at Store at last. The flow is shown in the figure 1 below.

Figure 1 - Overview of Retail Business

Another concept is Warehouse (W/H) and Distribution center (DC). Products keep at the warehouse, and then transfer to a DC, eventually supply to each stores. Figure 2 illustrates those relations.

Figure 2 - Warehouse and Distribution center

When do GR, the goods can transfer to W/H, DC or store warehouse directly. One of important information which are synced back to the Merchandise unit is the sales amount. This info helps Merchandise to decide which product should buy, what price should set, and etc.

Figure 3 - Receiving the products from a vendor

In addition, there are some concepts interesting, for example Loyalty unit, (or we can call it CRM) the unit which collect sell and customer information to predict or set the proper promotion for each customers.

Hope this article gives an idea about Retail Business. Until the next post!