What is the meaning of Merchant?
‘Merchant’ is a word in the business parlance that refers to a legal entity, whether an enterprise or an individual that is involved in the sales of goods. A merchant is concerned about selling and promotion of a brand; they do not concern themselves with production. Merchants sell products to customers to make a profit.
When did it start?
The concept of Merchandising is as old as man himself. It started as far back as when there was no money as a medium of exchange, and the only exchange system was traded by barter. ‘Merchants’ then, was a vague term used for anyone who was involved in business. Back then, almost everyone was a merchant as far as they had something to trade. It ranged from people trading with their neighbors to trade among countries. Many years down the line, merchants became a term used for large scale traders that dealt in high-value products and have become wealthy from its sales. At the time, that was the reality, while the trader was the term for people who engaged in small scale trading.
During the 16th century right down to the 19th century, merchants were awarded so much respect and high social status because they were usually very wealthy. But in the present day, none of these facts are necessarily true of the merchant.
Forms of Merchants
Although merchant is the compound name for anyone who sells products, a merchant could either be an E-commerce merchant or a traditional merchant. The difference between both forms is the platform on which they sell their products.
An e-commerce merchant is a merchant that deals strictly in the sales of goods online. They do not have physical offices. They make all their dealings on online platforms.
The concept of E-commerce merchant is relatively new in the distribution space. It came with the rise of the Dot-com wave and with technological innovations that have characterized the modern world. It is relatively cheaper to run and does not require so many human resources. It is a widely accepted form of merchants. Pundits state that eventually, it will dethrone the traditional style of merchants.
Traditional merchants sell their goods directly to customers in person. They are the kind of stores that have physical locations.
erchant is a company or individual who sells a service or goods. An ecommerce merchant is someone who sells exclusively over the Internet.
The types of Merchants
Merchants are classified into two typologies: they are either retailers or wholesalers.
· Wholesale Merchants
A wholesale merchant occupies second place on the supply chain. They buy directly from producers in large quantities, breakbulk, and sell to retailers. They are links between producers and retailers. They exist as B2B E-commerce businesses if they are E-commerce Merchants and wholesalers if they are traditional merchants. They usually have warehouses and well-managed delivery systems.
· Retail merchants
They are middlemen distributors. They buy stocks from wholesalers and sometimes directly from producers and sell to final consumers in small quantities. They are either B2C e-tailers or retailers. They contribute to increasing awareness about a producer’s brand.
· Affiliate merchants
Affiliate merchants are concerned with sales and profit-making. They are usually not a part of decision making in the company, and they are hired by producers or wholesalers to leverage their network and sell products. They are typically employed as a marketing strategy. They get paid based on the rate of sales they make.
Most companies combine the inputs of all three types of merchants in driving sales. Another thing to note is that some merchants do not operate solely as wholesaler merchants or retail merchants. They combine features of two or all types of merchants.