Wholesaling explained


ver wondered what the difference is between a wholesaler and a retailer. At times it can be confusing especially in Zimbabwe where wholesalers are now operating from smaller premises and selling direct to the public, whilst retailers are on bigger premises and selling to everyone as well. The traditional definitions no longer apply. But we well give it a shot

wholesalers are selling direct Wholesale refers to the selling of goods to the customers like retailers, industries, and others in bulk, at a low price. It is a type of business in which goods are being purchased from the producers by the wholesaler in big lots, and then the bulk is split into comparatively smaller lots. Finally, they are repacked and resold to the other parties.

Wholesalers do not pay much attention to the location of the shop and its appearance, and display of goods because they sell only a specific type of items, and their customers are generally retailers or other businesses who purchase the goods for the purpose of resale. These things do not matter to them at all.

In wholesale business, the wholesaler gives more emphasis on the quantity of goods, not on the quality. For starting a wholesale business, there is a huge capital requirement as the business size is large. It does not require any publicity or advertisement.

However, the customers of a wholesale business are spread in various cities, towns or even in different states. Most goods are sold on credit to the customers of the wholesale business. The price of purchased on wholesale is lower as it consists of less profit margin.

Key Differences Between Wholesale and Retail

The points given below elaborates the fundamental differences between wholesale and retail trade:

  1. Wholesale means the sale of goods in voluminous quantity, at a low price. The business of selling goods to end consumers in small lots at a profit is known as Retail.
  2. Wholesale creates a link between the manufacturer and retailer whereas Retail creates a link between wholesaler and customer.
  3. There are wide differences between wholesale and retail price of a particular commodity, i.e. the wholesale price is always less than the retail one.
  4. In wholesale business, there is no requirement of an art of selling the goods which are a must in case of retail business.
  5. The size of a wholesale business is larger than a retail business.
  6. In the retail business, the retail shopkeeper can choose the goods freely which is not possible in wholesale business because the goods are to be purchased in bulk.
  7. In wholesale business, the capital requirement is higher than in retail business.
  8. The location is of utmost important in retail, but in wholesale, the location does not matter at all.
  9. While selling the goods in retail the appearance of the shop and the display of items should be good to attract more and more customers. However, in wholesale, there is no such kind of need.
  10. There is no requirement of advertising in wholesale but retail business requires advertising to grab the attention of customers.

We hope we did not confuse you more…

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