Retail
In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells individual items or small quantities to the general public or end user customers, usually in a shop, also called store. Retailers are at the end of the supply chain.
The term is also applied where a service provider services the needs of a large number of individuals, such as with telephone or electric power.
Retail prices are often so-called psychological prices: a little less than a round number, e.g. $ 6.95. There is some evidence to support the firm belief which exists amongst retailers that greater than expected demand occurs at such prices. Theories about the cause include:
- For simplicity the consumer ignores one or more of the least significant digits; amounts like $ 6 and $ 7 are more easily handled than $ 6,95, and ignoring part of a number is easier than proper rounding; this effect is enhanced when the cents are printed smaller. Even though the cents are seen and not totally ignored, they may be subconciously be partially ignored.
- Psychological prices suggest to consumers that goods are marked at the lowest possible price.
- Now that consumers are used to psychological prices, other prices look odd.