Wholesale Vs. Retail: Facts You Should Be Aware About
First things first, what is the difference between Wholesale and Retail? And why are those differences important?
The word Wholesale refers to the selling of goods in bulk to the retailers and businesses at cheaper prices. A wholesaler is a person or company who sells products in bulk to the retailers for onward sale either directly or through a middleman.
Wholesale usually provides a large amount of goods, but can also take orders for small quantities as well. The wholesaler may also be the manufacturer or the producer of the goods.
The wholesaler sells only specific items and is least interested in the location of the shop, packaging and display of the goods. They are more interested in the quantity and not the quality of the products.
When a buyer buys a product and sells it to the final customers for the consumption, and not for any resale this is known as Retail. The retailers are the mediators between the wholesaler and the customers. Retailers purchase goods from the wholesaler and then sell them to the customers. The retailer sometimes may be the manufacturer of the product, or may acquire relevant products from a wholesaler or retailer.
The profit margin of the retail business is high as the retailer buys goods at cheaper rates and sells them to the customers at a higher price. The final price in which the retailers sell the product includes expenses such as rent, electricity, salaries of workers, etc.
Points to keep in mind to grow your business as a wholesaler or retailer:
If you are planning to become a wholesaler then prioritize selling to retailers by providing your resellers the best service to allow them to grow their business and trust you as a repeat supplier.
If you are going to focus on retail, prioritize the channels that will grow your business to reduce the need to rely on resellers to provide you with turnovers.
If you feel able to manage both wholesale and retail together, think about the strategies that will allow you to grow the retail side of your business while being able to sell it to the retailers without competing against yourself.