In elaboration, for example say you're selling a villager, lets say you want 5 mil for said villager. The buyer offers 5 mil for this villager, but you don't want to waste time having the buyer put 5 mil down on the ground. So you put several items up for sale in retail that add up to 5 mil for the villager you're selling so then the buyer can come buy them. When the buyer buys these items from retail, because they are your items, the bells the buyer spends on these items gets transferred straight into your bank account until it eventually adds up to 5 mil. (you may have to put new items in retail more than once though for the buyer to purchase, as the limit you can charge for something in the flea market space is 99,999 I believe) A lot of people use this method because its a lot more easier than dropping several bell bags on the ground, which can take ages depending on how much it is and it wastes less time. It also means it creates less mess for the seller to pick up.
as others have said, the retail method is to avoid the hassle of buyer dropping bell bags on the ground and seller having to pick them all up.
when i sell by retail method, i usually just put some loose fruit in my recycle shop as the items that will be purchased. I believe the maximum price for an item you put up for sale is 999,999 bells (practically a million).
one important thing to remember though as the seller: the funds from the recycle shop purchases don't get transferred into your character's ABD account until the next calendar day in the game...
