A wholesaler refers to any person who buys products in large scales and sells such products to the retailer in bulk quantities. They give the retailers a chance to purchase goods in bulk with a lower price compared to when they would have bought them as single items.
Wholesalers source their products direct from the various manufacturer where they take advantage of large economies of scale. On the other hand, they would also source their products from multiple resellers who deal with various forms of products.
Most consumer goods in the market would always start from the manufacturer who ensures the designs are made and packaged well. The wholesaler will source these products and sell to the various retailers due to the existing relationships in the market. Often the chain would start from the Manufacturers to Wholesaler to Retailers, and finally Consumers.
Wholesale buying would act as an agent who links the various manufacturers in the market and the retailers to ensure the products reaches the final consumer on time. To have a better understanding of what wholesaler buying is all about, it is good to consider wholesalers in terms of:
Wholesaler acts as an agent in the chain of distribution where they connect the manufacturer and the retailers who eventually connect to the final consumer. The wholesaler will ensure there is a good flow of products from the manufacturer to the final consumer. On the other hand, in the case where the goods are less inferior or does not meet quality, the wholesaler would act as an agent and ensure they are returned to the manufacturer.
WHOLESALER AS PROFESSIONALWholesaler acts professionally to ensure there are good flows in the market. It calls for a lot of professionalism from the wholesaler to ensure that the chain of distribution works effectively and the consumer gets access to a quality product. As a wholesaler, you will undertake different professional roles in line with your duties.
There is no fixed price for the wholesaler since they deal with different products which come from different industries. Wholesale prices refer to the actual prices which will be charged on the different products which are sold to the wholesaler. The wholesaler will sell products in bulk, and the prices will vary depending on the nature of the products. The wholesales uses economies of scale to obtain the products from the manufactures and sell them in bulk, which makes the price to be relatively lower compared to the retail prices.
There are four types of wholesalers in the market and they include the following:
These wholesalers who buy products from different manufacturers in different industries. In addition to that, such wholesalers will add some value to the product and will use more suppliers to supply the goods.
MERCHANT WHOLESALERSThese wholesalers will buy products from manufacturers and store the product and later resell the products retailers. In addition, it is essential to note that such wholesalers do not have any restrictions when it comes to selling the products.
SPECIALITY WHOLESALERSThese are wholesalers who deal with products from a specific industry, but many have the products from the different suppliers in the market. Such wholesaler will have excellent pricing and also higher quality products.
BROKERS AND AGENTS WHOLESALERSBroker and Agent Wholesalers do not own the products which they are selling, but they will act as an agent and give the wholesalers the best deals when it comes to the prices and quality of the products sold. Most of these wholesalers work for commissions.
Delivery speed of the wholesaler
Reputation in the market
Staff expertise for the wholesaler
Contract negotiation
The delivery speed of the wholesaler should be the determining factor of whether to work with a particular wholesaler or not. You need a wholesaler who delivers the products within a short period.
REPUTATION IN THE MARKETBefore you choose the wholesaler, it is good to consider the reputation they have in the market. If other people gave them bad reviews, then you should avoid this wholesaler.
STAFF EXPERTISE FOR THE WHOLESALEREnsure that the expertise level of the wholesalers employees is a good long term strategy.
CONTRACT NEGOTIATIONChoose a wholesaler willing to enter into a long term contract with you. It will develop a good relationship which will last for long.
Wholesalers sell products in bulks while the retailers sell the product as single items.
Retailers sell products directly to the consumers, whereas the wholesaler would sell to both retailers and consumers.
Wholesaler prices are relatively lower while the retailer prices are generally higher.
Price is relatively cheaper compared to retailers
There is the availability of a different range of products
It saves time since you are revolving around on the place
They offer carriage inward to clients
Decide on what to sell
Decide which types of wholesale do you want to venture
Have an evaluation of the available finances
Prepare a business plan
Deciding on what to sell is the first step toward becoming a wholesaler. Once you have made up your mind to become a wholesaler, it would prepare you to the next level, which is to decide from the various multiple wholesalers.
HAVE AN EVALUATION OF THE AVAILABLE FINANCESDifferent types of wholesaler require different start-up capital, and this will be guided by the available funds which you have at the moment.
The last step is to prepare a business plan which will act as a guideline. The business plan will also help to put your business into perspective.