Advantages of retail trade:
1. Options of selection:

A retailer keeps and sells products of several producers. Hence, customers get several options to choose from.

2. Home delivery of goods:

Some retailers provide their customers the facility of delivering the purchased goods at their homes even if the customers order on phone. This help customers to save their time and effort.

3. Redressal of customer complaints:

• Retailers are in direct contact with customers. If customers have any complaints regarding a product then they complain to retailers.
• Retailers pass these complains to wholesalers and wholesalers pass them to producers and solve the complains quickly.

4. Selling goods on credit:

Frequent customers develop good rapport with retailers. So, retailers also provide credit or even installment facility to such few customers based on their rapport with retailer and economic condition.

5. After sales service:

Retailers provide after sales services such as assisting in installation, repair, exchanging faulty products or taking them back, etc.

6. Helps customers to make purchase decision:

Retailers provide customers information on utility, features, quality, price, etc. of the products. Their explanation and selling skills helps the customer make decision about buying a product.

7. Freedom from storage:

Retailers provide goods to customer as and when they need. This helps customers to free themselves from unnecessarily stocking products.

8. Guidance to customers:

• Retailers guide the customers in various ways. They guide them about the changes likely to occur in near future, new products and schemes about to be issued by producers, guide them about supply or demand of a product, price rise that it may witness, etc.
• Correct guidance can help the customer to choose a right product at a right time.

Limitations of retail trade:
1. More capital investment:
Customers of different taste, preference and economic condition come to retailers. Hence, retailers need to keep a variety of products to cater their needs. As a result, retailer needs more capital investment.

2. Risk of deterioration of perishable goods:
Perishable goods like milk and milk products, fruits and vegetables, etc. perish very fast. If a retailer is unable to sell them on time they perish and the retailer has to bear the loss.

3. Risk of goods getting outdated:
The market trend changes with changes in technology, customer’s taste, fashion, etc. For example, people now mostly prefer smart phones over regular mobile phones. In such situations a retailer need to sell old unsold outdated stock at cheaper prices to recover his investment.

4. Risk of loss, shortage or fluctuations of price:
At times goods may get damaged at retailer’s shop, or their prices may fall or increase, or their supply would be less compared to their demand. All such situations cause loss to retailer.

5. Bias:
Sometimes a retailer may have some bias for a particular producer or his product. For example, he may not be happy with the commission he gets on the product or he may dislike the product personally. Owing to these reasons he may be bias towards them and not promote their sales.