What is wholesale? Wholesale means’selling in small quantities’ and ‘for the consumer’. Wholesale is the distribution or selling of products to retailers or to commercial, industrial, institutional or other non-standard business users; to non-retail customers; or to other wholesale suppliers. Essentially, it is basically the resale or wholesale sale of products to anybody other than the normal consumer.
Wholesale involves many important terms and understandings that are necessary to effectively understand what wholesale product is. In simple terms, a retailer can sell goods to customers at retail price or sell goods to retailers at wholesale price. Wholesale distributors buy goods from manufacturers and then sell them to retailers at wholesale price. A manufacturer can sell its products at retail price to a retailer or it can sell its complete product at a wholesale price to a retailer or it can sell its part of a product to a retailer only. Wholesalers can also be individuals or businesses that are engaged in the business of buying and selling goods to retailers. Either way, the buyer and seller are both benefitting from the transaction.
A wholesaler who purchases large quantities of a good can do one of two things: he can either purchase the whole lot at wholesale price and then resell it or he can purchase from a manufacturer and then resell it at retail price. Sometimes, a wholesaler buys from manufacturers and then warehouses the products in lots. Sometimes, the wholesaler acquires a smaller quantity of a good and then warehouses it until its demand increases. Wholesale is a very profitable market because there are millions of buyers on the internet and not everyone who goes into the business of buying and selling products is going to make money. However, to make a profit wholesaling requires you to source your products from reliable manufactures and you need to have the warehouse system set up to handle large quantities.
Buying goods from manufacturers is a very safe way of proceeding because the manufacturer will be able to ensure quality. This means that the wholesaler will be getting goods at much lower prices than the manufacturer would be able to offer them. Most manufacturers would be unwilling to sell goods at prices lower than their own. This means that they won’t want to sell products at wholesale prices unless they are making a huge profit and in some cases they don’t even make any profit.
Wholesalers can sell products to end-users in the same way as they would buy them. The difference between buying from a wholesaler and buying directly from the manufacturer is that wholesale buyers get supplies in large quantities at low prices and then resell products to end-users at a higher price. Some wholesalers also engage in drop shipping, where they send orders to end-users and the manufacturer ships the products to end-users at a certain cost.
There are also some key differences between retailers and wholesalers. Retailers sell goods to end-users in one convenient location. A retailer generally has several stores in different locations and sells goods to each of them according to their individual sales goals. In a retail environment, a retailer may sell goods according to a specific time frame such as a particular month or season. The aim of a retail store is to make money. Wholesalers on the other hand primarily sell goods to end-users in one location.
Another key difference between a wholesaler and a retailer is that the wholesale seller does not need a sales floor. Retailers do need sales personnel to answer phone calls and take orders. These employees need to wear uniforms and receive training to keep their skills relevant. This also costs a lot of money since these employees have to be paid to be available during business hours and they may not work on a fixed schedule. This factor costs money to the business owner, since there has to be a payroll and benefits separate from the selling price of the product being sold by the small business owner.
Wholesalers, on the other hand, can sell products to end-users in any location without having to hire a sales staff and they do not have to purchase or rent a store. A wholesaler can set their own retail price for certain products and they determine what price they will sell a product for through a specified wholesale price formula. A retailer does not have control over whether or not a customer buys a product, and that is why it makes more sense for the small retail business owner to purchase their products from a wholesaler.