Wholesale is the business of buying goods in large quantities, usually directly from manufacturers or sources, at discounted prices, and then selling these goods in bulk to retailers, other businesses, or professional users rather than to the end consumers
. Wholesalers act as intermediaries in the supply chain, facilitating the efficient distribution of products by purchasing in volume to benefit from economies of scale and passing on some of these cost savings to retailers
. Key characteristics of wholesale include:
- Bulk purchasing and selling: Wholesalers buy large quantities of products at lower prices and sell them in bulk to retailers or other businesses, who then sell smaller quantities to consumers
- B2B focus: Wholesaling primarily serves business customers such as retailers, industrial users, or other wholesalers, rather than individual consumers
- Profit model: Wholesalers make profits by selling goods at a higher price than their purchase cost, though their profit margin per item is typically lower than retailers due to the volume of sales
- Role in supply chain: Wholesalers help manufacturers reach a broader market and reduce the complexity for retailers by consolidating products from multiple sources and providing logistics and distribution services
- Variations: Some wholesalers may sell smaller quantities, especially to new retail customers, and wholesale can also refer to specialized contexts like wholesale banking or real estate wholesaling
In summary, wholesale is the sale of goods in bulk to businesses rather than consumers, enabling manufacturers to distribute products efficiently and retailers to stock inventory at lower costs.
