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Merchandise stores have a couple of objectives. They need to make a decision on the price that they re willing to sell the merchandise, and the quality of service that they need to give customers, that’s basically it.  There are a couple of well known department stores in the world and they are Wal-Mart http://www.walmart.com/ and Target http://www.target.com/.

A department store can have the option of setting high prices for items and providing quality service, or they can become a discount store. A discount store sells items a frugal price but provide little to none customer service. Target is a discount store and that’s why they are so distinguished. They provide good customer service, and high quality brand name products.

Target prices are extremely competitive because they sell well known material with a nice discount.  A merchandising business makes their income by the purchasing and selling of goods. Every merchandising company whether it’s wholesale or resale uses a similar accounting formula. For a retail company the management is a difficult task because the buying and then selling of goods make it an uneasy task.

The accountings for a merchandising business compared to that of a manufacturing business are just about equal.  The cash flow management is important for a merchandising business and it requires organizing a company’s receipts and payments of money.  If a company is not capable of paying their bills when they are needed then that is when they will go out of business.  

This is very true for merchandising business, and the goods that are sold are known as merchandise inventory. The normal transactions that merchandising business go through is known as the operating cycle.  First, the business purchases the merchandise inventory, and pay for it on either cash or credit and second, they sell the merchandise inventory for wither cash or credit.

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