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What is wholesale?

| Blog | December 27, 2012

What is Wholesale


What exactly is a wholesale market and who exactly is a wholesaler?

A wholesaler is a person who essentially works as a middleman between a manufacturer and a retailer. The wholesalers purchase products from manufacturers in large quantities and at discounted prices. They then sell these products to the retailers at higher prices. Almost all manufacturers supply minimal full pallet loads, however, it is better if distributors purchases whole containers from them at a time. Hence a manufacturer manufactures the product and sells it to wholesalers at discounted prices. The wholesalers sell the products to the retailers at relatively higher prices and then the retailers sell it to the customers at market prices.

There are actually quite a few different types of wholesale markets. There is the secondary wholesale market which is commonly found in developing nations. They are usually located in cities or districts and take a huge quantity of the produce from the rural markets of the production areas. The transactions done here are usually on a much smaller scale and are usually between the producers and the traders. The secondary wholesale markets are more like permanent operations. There are also terminal wholesale markets which are situated mainly at metropolis areas. Through the terminal wholesale markets the products are channeled directly to the consumers through trade between the wholesalers and the retailers. At terminal wholesale markets, products are also assembled for the purpose of export

To become a wholesaler it is very important to possess excellent negotiation skills, this will enable you to get the products from the manufacturers at lowest possible prices. To get the best prices a wholesaler will have to resort to tactics like quantity discounts, bargaining and haggling, discounts for early payment and also purchasing one whole container. A wholesaler needs to undertake an extensive research and also evaluate all the available channels to decide about the correct purchasing of products – competition in the market and market factors play a very important role in this. Since the wholesalers work along with the manufacturers to ensure the supply of products to the retailers, they have to double up as distributors at times as well. I hope this post helped you understand what is wholesale and how wholesale works, I tried to put it in simple terms so that it is easily understandable. I hope you now understand what is wholesale and how it works to better your business knowledge and start trading as a middleman. If you looking to find a reliable supplier, checkout our full wholesale directory for top online suppliers in most product categories for free.



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