Accounting for a Merchandising Business
A merchandising business is a business that buys goods and sells them at a profit. Although most merchandising businesses operate either as retailers or as wholesalers, some operate as both retailers and wholesalers.
Click each type to learn more.
Retail:
In a retail business, merchandise is sold to the final user, or consumer. The seller who sells merchandise directly to the consumer is called a retailer. For example, while purchasing shoes, jeans, and cosmetic products from a shop, the businessperson who sells the goods directly to you is the retailer, and you are the consumer.
Wholesale:
In a wholesale business, goods are bought in bulk from manufacturers and resold in small quantities to retailers. Some wholesale businesses have their own retail shop and sell the goods directly to customers. In this case, the wholesaler also acts as a retailer.