Retailing is the process of acquiring finished items from producers and reselling them to end-users. Retail and wholesale trade is India’s largest industry, accounting for about 23% of total GDP. Indian retail is estimated to be worth US$ 500 billion, making it one of the world’s top five retail marketplaces in terms of economic value. With 1.2 billion inhabitants, India is one of the world’s fastest expanding retail markets.
Retail Business Concepts
Retailing encompasses the entire spectrum of finished goods sales to retail customers. Several of the most popular retail business models include the following:
Supermarkets
In India, grocery stores are the most prevalent type of Retail Company. Grocery retailing entails the sale of various food and non-food items, including meat, produce, cereal, dairy goods, and health and beauty aids and cleaning supplies. A food store might be located in a physical place or online.
Stores of General Merchandise
General merchandise stores are large-format supermarkets that also sell a diverse range of products. Generally, available merchandise stores sell clothing, furnishings, sporting items, and housewares. Biz Bazaar, TATA Croma, and others are examples of general retail stores.
Specialty Retailers
Specialty stores are retail establishments that focus only on a single product. Numerous retail establishments fall into the category of specialty stores. A specialty store may include an auto parts store, an electrical accessory store, a cell phone store, a computer store, a clothes store, or a home furnishing store.
Registration of Business Entities
Retail enterprises often have a more considerable annual revenue per employee than service organizations. As a result, retail firms should be established as Private Limited Companies or Limited Liability Partnerships. The Private Limited Company or Limited Liability Partnership business organization structure enables the retail company promoter to scale up, establish multiple sites, or transfer the business – as needed. Along with scalability and transferability, a Private Limited Company or Limited Liability Partnership will give the business more straightforward access to credit and liability protection.
Registration for Taxes
Retail enterprises are concerned with the sale of goods and services. As a result, retail firms must register for GST with the State Sales Tax Department.
The license under the Shop and Establishment Act
Along with company entity and GST registration, a retail establishment may be required to obtain a shop and establishment act license. The Department of Labor or the appropriate State Government is responsible for issuing shop and establishment act licenses. Thus, depending on the state where the retail business maintains a physical location, a shop and establishment act license may be obtained from the local Department of Labor officer. For additional information, please see our page on the Shop and Establishment Act License in India.
Establishing an Online Retail Company
The success of companies such as Flipkart, Snapdeal, and FirstCry has elevated online retailing to a new level of prominence, with increased adoption among India’s youth. Due to the low prices and convenience of online shopping, many people are increasingly shopping online. As mentioned previously, starting an internet retail firm entails obtaining business and tax registration.
However, online retailing can be divided into two distinct phases: becoming a retailer on an eCommerce platform and establishing a new eCommerce website. For most retailers, it is preferable to join a based eCommerce platform such as Flipkart, Snapdeal, or Amazon than to launch their eCommerce website. ECommerce platforms handle marketing, logistics, and technological development, simplifying getting started with eCommerce for the average user.
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