Question

Topic: Student Questions

How Does Retail Marketing Work?

Posted by Anonymous on 6/24/2005 at 10:43 PM ET 75 Points
How does retailing work?

When a manufacturer sells its products to retailers does the retailer BUY the products FROM the manufactuer or does the manufacturer get paid once the retailer has sold the product to the final consumer?

What happens to products that dont sell at all?Are they discarded by the retailer or are they shipped back to the manufacturer?Does the manufacturer get his money on the front end or the back end?
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted by Carl Crawford on 6/26/2005 at 2:19 AM Accepted
    I think that for most fmcg businesses they BUY the product on Credit, then try to sell it before the credit is due. If they are able to sell it in that time then they have a positive cash flow (eg profit and money back into the business). If they don't then they have a negative cash flow, until they sell the product.

    If the product is not sold then they discount the price until it is sold. Even going in to a loss, because it is better than losing $10 than $100 if they just throw it away.
  • Posted by bobhogg on 6/27/2005 at 4:18 AM Accepted
    mac504...

    FireFox is right for the vast majority of retail situations.

    Just occasionally, however, manufacturers may offer their goods to retailers on what's known as a "sale or return" basis; in other words, the manufacturer retains ownership of the goods and takes back those that don't sell plus the money from those that did sell. This might happen, for example, when launching a new, untested, product where the retailer may be reluctant to risk buying the goods outright.

    Hope this helps.

    Good luck,
    Bob
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Student Questions)