Choosing where to purchase

Having decided what to purchase, you will often need to decide where to purchase your desired product. Although there are a number of avenues where you can buy goods, where you choose to purchase could affect the quality and price of the product.

What is retail?

Retail is the main interface through which consumers purchase goods. Retail outlets are consumer-driven; their main purpose is to sell the product by interacting with the consumer. Retailers usually have a physical space specifically designed so that a consumer can interact with the product and the seller. Examples of retail outlets include any type of store you will find in a shopping centre including supermarkets, department stores, specialty stores and boutiques, as well as direct marketing such as mail order, door-to-door sales and internet shopping.

The main advantages of purchasing via a retail outlet include convenience, a wide variety of choice and service, even if you may pay more for these advantages due to overhead costs (shop rental) and employee wages.

What is wholesale?

Wholesale involves the bulk purchase and redistribution of goods. For the most part, wholesalers connect the product manufacturer to the retail outlets and specialise in distributing the products to outlets where they are more likely to sell. Wholesalers are logistics-driven, that is, they are mainly concerned with the profitable distribution of products.

Wholesalers do not need to spend money on services or marketing to consumers and do not need to rent or purchase a retail space, which benefits consumers through lower prices. Not all wholesalers have the facilities to sell to consumers. Some wholesalers perceive that selling directly to the public negatively affects their relationships with the retail outlets that specialise in consumer relations. Wholesalers may also have a limited choice of product as they tend to buy in bulk, not diversity.

Direct from the manufacturer

Manufacturers are product-driven, which is to say their focus is on creating the product. This includes sourcing material, designing and packaging the product. Although they have the consumer in mind as they produce the item, they are not directly involved in selling the product to the consumer.

Some manufacturers sell direct to the public, such as with vineyards where customers can buy wine at the cellar door, or markets where farmers might sell produce directly to the consumer. Buying from the manufacturer usually reduces the price even further than wholesale purchases but choice is limited by what the manufacturer produces. Often it is more difficult to access the place of manufacture than a retail outlet and many manufacturers will not have the facilities to accommodate public purchases.

Private sales

Private sales involve the direct interaction between the seller and the purchaser. The seller may have purchased the product from another source or they may be the manufacturer, such as an artist selling a painting.

The biggest advantage of a private sale is the ability to negotiate price in response to the condition of the item. A used item may be out of warranty, which will enable the purchaser to buy it at a much lower price than originally paid. The main drawback of a private sale is the lack of after sale support, variable availability of your desired item and often, lack of choice.

Mixed marketplaces

There are a number of outlets that combine various selling methods in order to suit either the seller or the purchaser. A weekend market usually involves wholesalers, manufacturers and/or private sellers as the product sellers with purchasers able to negotiate price. Product prices are usually lower because sellers do not factor rent and labour into the price as with retail outlets, but consumers may lose out in terms of convenience - the time and location of the market, after sales service and limited product choice and availability.

An auction house is another type of outlet that differs slightly from the common marketplace. Auctions involve a specific item or set of items purchased by the highest bidder, the person willing to pay the most for the item. This selling style tends to benefit the seller. As a buyer, you would need to ensure that the item meets all your requirements and have the ability to pay whatever you bid. The more exclusive the item, the more you can expect to pay.

Shopping online involves the greatest mix of selling styles. Various manufacturers, wholesalers, retailers and private sellers sell online, which gives the consumer the largest possible scope for buying - either at a fixed price or at auction. The two major advantages of shopping online are convenience and product availability. Often the price of an item is lower than retail because it is relatively cheap to set up a website compared with setting up at a physical location. Drawbacks include shipping costs, time between purchasing and receiving the item and lack of tactile interaction with the product.

As with any purchase involving distance between the seller and purchaser, including mail order, buyers run the risk of being deceived as to the nature of the product or not receiving the product, once they have already made their payment.