In the supply chain industry, wholesale and retail are two major components of the distribution process. When a company manufactures any products it is first sold in bulk quantity to the wholesaler, who then sells it to the retailer and further the retailer sells it to the ultimate customers. In simple words, a wholesaler buys the product in bulk from the manufacturer and sell it to the retailer, who then sells it to the end-users.
Wholesale is selling of goods in bulk to the retailers and businesses at cheaper rates. The wholesaler buys the products in bulk, breaks it into small parts, repacked, and sells it to the retailers. The wholesaler sells only specific items and cares least about the shop’s location, packaging, and display of the goods. They are more interested in the quantity not the quality of a product.
Wholesale businesses require considerable investment, rather than focusing on promotion and advertisement. Wholesalers serve customers spread across various cities, towns, and states. They usually sell most purchases on credit to their customers.
When buyers purchase a product and sell it to the final customers for their consumption, rather than for resale, this is known as retail. In fact, retailers act as the mediator between wholesalers and customers. They purchase goods from the wholesaler and then sell them to the ultimate customers in small quantities. Moreover, the profit margin in the retail business is high because retailers buy goods at cheaper rates and sell them to customers at a higher price. Additionally, the final price at which retailers sell the product includes expenses such as rent, electricity, salaries of workers, and other operational costs.
why wholesale is cheaper?
The wholesale is cheaper because they buy the products in bulk directly from the manufacturer and get large discounts for buying large quantities of goods.
What do you mean by wholesale price?
A wholesale price is the price imposed for a product when sold in bulk to the distributors or large traders.
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