I was in a discussion the other day and the question came up: What do retailers do? the answer is three main things.
The first service we provide: assorting.
A retailer doing their job provides an assortment of products, whether
it be PDFs from Drive Thru RPG, cards from Troll and Toad or Star City,
assorted physical RPGs and board games from your local FLGS (that’s Friendly Local
Game Store) or even a shopping cart full of shampoo, toothpaste, laundry
detergent and taco sauce from Wal-mart
or Safeway, the customer wants to combine as many of their purchases into as
few a number of trips as possible. Long
gone are the days of shopping lists and trips to several different stores to
fill them. If I want to buy groceries,
garden supplies or games, the customer wants to visit as few locations as
possible in order to get what they want.
The larger assortment a store offers, the more likely the customer will
stop there and purchase as much as they can from there list. If
you want to buy Magic cards, which store will more likely get your money, the
one that stocks Standard legal boosters and cards but little earlier or the one
that stocks boosters three blocks back and single cards to match. That’s one of the advantages online retailers
have over brick and mortar, an almost infinite amount of shelf space. Which leads us to the second service
retailers provide:
Transporting. If you want a banana, as I point out to my
students regularly, you do not travel all the way to Central America to get one. Instead, you drive to your local supermarket
and buy a hand of them. Same thing with
Magic Cards, or Ticket to Ride or Castles and Crusades. A customer does not want to drive to China,
or Europe or Arkansas to get a copy; they want to go to an online store to
order it and have it delivered or go to their FLGS and pick it up there for
even faster gratification. Retailers bring the product conveniently to
consumers.
The third main thing retailers do: break bulk. Distributors do this regularly,
even moreso than retailers. For most manufacturers, it is most convenient to ship products in case
packs. Konami does not ship out single
booster packs of Yu-Gi-Oh!, the shipping
cost eats up all the profit. They ship in cases of booster displays to
distributors or retailers, who then break the case down to sell it by the
display (at distribution) or the individual pack, at retail. The consumer has
no desire to purchase a case of Settlers of Catan or Rogue Trader, they want
one copy, just as a customer at Target
wants one box of Tide detergent or Huggies, not a case of 6 boxes. Retailers and distributors buy in larger
quantities so the consumer can buy the quantities they want.
That’s it. The
retailer’s basic job boils down to three functions: have the product the customer wants when they
want it, where they want to buy it, in the quantities they want to buy. Everything else the retailer does facilitates
these three activities.