Merchandising is a process where retailers buy merchandise, manage inventory and present products for sale to customers. Stocking is a simpler process of taking merchandise from storage and putting it in displays or on shelves for sale. These processes are closely related and integral to retailing.

Buying Merchandise

Long before merchandise is presented to customers, company buyers meet with vendors, pick products, negotiate price and terms and purchase goods. This phase of merchandising is vital, because it affects a retailer's cost basis and eventually its pricing strategy. Once merchandise is acquired, the next phase of merchandising is often inventory control. This is the system of storing and managing products before they are distributed to stores.

Planning

Coinciding with the buying process is the planning stage of merchandising. This includes decisions on how to allocate merchandise to stores, how to display it to get attention, and how to price it. In essence, merchandise planners collaborate with markets to best place merchandise and market it to target customers to attract buying interest. Pricing is a key part of merchandise planning, since it affects both customer demand as well as profitability.

Inventory Replenishment

The most significant element of stocking is replenishment of inventory on shelves or in displays as items are purchased and stock becomes low. This often involves store associates recognizing that merchandise is low, retrieving more from storage and putting products on the shelf. Setting up new displays and putting pricing labels on shelves or products is usually part of this process as well.

Visual Merchandising

In-store employees also have responsibility for following through on plan-o-grams or visual display layouts prepared by merchandise managers. As customers interact with products, associates also typically maintain visual appeal through processes such as fronting and facing. This is where stock is pulled forward to the edge of the shelf or display and faced forward to get customers' attention. Placing products in the front that are closer to expiration, if applicable, is a part of this step, too.