Difference Between Merchandising Company and Service Company

What is Merchandising?

Merchandising in its most basic sense, means the promotion of specific products or categories of products. Depending on the goals, merchandising offers recommendations to the users, highlights the best products, and follows trends. Merchandising refers to how shops and businesses organize their products. It increases sales by making a store appealing to the customers, improves profitability by generating a higher margin price, and controls costs by improving the productivity of the sales floor and each employee....

History of Merchandising

1. Origin of Merchandising: The concept of merchandising started in the late 19th century by Jasper Freemont Meek. He is known as the founding father of merchandising who created the first branded tote bag for a shoe shop. This started when he owned a newspaper in Ohio, and later in 1881, he had a pioneering idea to start creating printed burlap bags to give to the children to keep their school equipment safe....

How Merchandising Works?

Merchandising plays a crucial role in the overall success of the business. There are two simple factors for effective and successful merchandising which are visibility and appeal. The more visible a product is, the more likely it is to be seen and bought, and the more appealing a product is, the more likely it is to be purchased. Merchandisers conduct market research to understand the tastes of the consumers, market trends, and competitive landscapes. Analyzing this data helps to identify consumer behavior and guides the merchandisers to make appropriate decisions. Generally, brands create visually appealing displays to showcase products in-store or online. They utilize elements of merchandising such as lighting, signage, layouts, and other elements to gain attention and enhance the overall shopping experience. However, effective merchandising also demands discipline and proper planning. It needs attention daily. The marketing team mainly focuses on the customers’ needs and creates a sense of urgency to acquire the company’s products and services. To reach the target audience firms use various channels of communication including social media, e-mail, advertising, etc. They also collaborate with marketing teams to conduct promotional events and campaigns. It is all about having the product in front of the customer that they want to purchase....

Elements of Merchandising

There is more to merchandising than just displaying the products attractively. Various factors altogether make merchandising effective and contribute to the ultimate growth of the organization. Various elements involved in good merchandising are discussed below....

Merchandising Strategies

To promote a product or a brand and make the merchandising process effective, it is necessary to have a proper strategy. Some merchandising strategies that help in brand promotion and attract customers are :...

Benefits of Merchandising

1. Increase Productivity: Good merchandising increases the productivity of both the sales floor and employees. Productivity improves when retailers can increase sales using their space which is designated for the sale of merchandise. Employees increase their productivity when the time of employees is used in a better way rather than spending most of their time guiding the customers toward the product they are looking for. That is when various elements of merchandise come into action....

Types of Merchandisers

1. Fashion Merchandiser: Fashion merchandising means doing all the activities required for fashion forecasting. After forecasting, they develop and design according to the demand of the future. Fashion is set according to the demands of consumers and the primary objective of merchandising is to create a stock of products that consumers are likely to accept. The roles of fashion merchandisers include forecasting, design, and sample development....

Difference Between Merchandising Company and Service Company

Basis Merchandising Company Service company Main Product A merchandising company buys tangible goods from suppliers and then resells them to the ultimate consumer. Service companies are not engaged with tangible goods to produce income; rather, they provide services to customers and charge fees for the services rendered. Cost These businesses incur production costs, such as purchasing new materials and labor for producing goods. For service business expenses are mainly overhead focused and labor is the main and largest expenditure. Types Merchandising companies are broadly classified into retail and wholesale companies. Retail companies sell products directly to consumers, and wholesale companies sell products directly to retailers or other wholesalers. Service companies are those whose main agenda is to provide services. These may include consultants, accountants, financial planners, and insurance providers. Income statements Merchandising statements are more complicated as they hold an account for product inventory. An income statement for a service company does not include the cost of goods sold....

Frequently Asked Questions (FAQs)

What is Merchandising?...