A retail business is defined as the sale of products or services on a unit basis to consumers for personal or household use. It is important to note that goods purchased from retail businesses are not intended for resale. In practice, retail business owners typically acquire products or services in bulk from producers and then sell them individually to consumers.
Retail businesses frequently collaborate with other business owners to ensure the consistent supply of goods and products. The simplified supply chain flows from the producer to the retailer and ultimately to the end consumer.
Types of Retail Businesses
Retail businesses are designed to serve consumers on a large scale, often offering a wide variety of products. As such, retail businesses can be categorized into several types. Below are examples of retail business categories:
- General Stores
General stores or grocery stores offer a wide range of products, generally aimed at meeting the daily needs of consumers. These products include food, beverages, cosmetics, kitchen essentials, bathroom supplies, and other household items. Examples of general stores include department stores, supermarkets, minimarkets, and similar establishments. - Specialty Product or Service Stores
This type of retail business focuses on selling a single category of products or services. While they offer only one type of product, they may feature multiple brands. These businesses tend to be more specialized and emphasize the service they provide. Examples include workshops, car showrooms, restaurants, jewelry stores, and more. - Online Stores
The advancement of digital technology has led to the rise of online retail businesses, a sector that continues to expand daily. Typically, online retail stores sell products or services through e-commerce platforms, websites, mobile applications, or even telephone orders.
Retail Business Licensing
Retail businesses, including minimarkets, supermarkets, department stores, hypermarkets, and wholesale grocers, are defined in Article 1 Number 26 of Government Regulation No. 29 of 2021 on Trade Sector Management, or known as PP 29/2021.
A retail business can be established either as a business entity with legal status or as a business entity without legal status. In either case, a business license is required to legally operate the retail store.
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Requirements for Obtaining a Retail Business License
To obtain a retail business license, the following documents must be submitted:
- A copy of the principle license issued by the regent/mayor or governor;
- A social-economic analysis of the local community and recommendations from the relevant authorities;
- A copy of the location permit from the National Land Agency (BPN);
- A copy of the environmental disturbance permit (SITU);
- A copy of the building permit (IMB);
- A copy of the company’s deed of establishment and its legalization;
- A statement of commitment to comply with applicable regulations;
- A feasibility study and its impact on the local retail business community;
- A retail business license application, signed by the owner or manager, submitted to the licensing authority.
Once all required documents are submitted, the regent/mayor or governor will issue the business license for the establishment of the retail store. The authority to issue these licenses may also be delegated to the head of the trade department or the officer in charge of implementing the One-Stop Integrated Services (PTSP).
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Supervision and Monitoring
The supervision and management of retail store establishment and operations are overseen by both the central government and local administration, known locally as pemerintah daerah or Pemda. Consequently, the implementation of retail business licensing is governed by the regulatory provisions enacted by the local administration.
The process of obtaining a retail business license can be time-consuming, involving numerous administrative and procedural requirements. To make the licensing process for your retail business easier and smoother, having the right support is key. At SIPR Consultant, we provide expert help every step of the way, guiding you through the required regulations to ensure your business gets off to a successful start. Get in touch with us today!
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