Who is a wholesaler? A wholesaler is a business that buys goods in bulk from manufacturers and resells them to retailers or other businesses at lower prices.
Beyond bulk buying, wholesalers add value by storing goods, breaking shipments into smaller units, and helping retailers access products without dealing directly with multiple producers.
In this article, we will explain the meaning of wholesaling, what wholesalers do, the different types, pricing differences, benefits, challenges, and where they fit in global distribution channels.
See also: How to Start a Wholesale Distribution Business
Key Takeaways
- A wholesaler buys goods in bulk from manufacturers or suppliers and resells them at wholesale prices to retailers, distributors, or other businesses.
- The wholesale model adds value through storage, breaking bulk, logistics, financing, and providing market insights.
- Different types of wholesalers include merchant wholesalers, cash-and-carry, rack jobbers, drop shippers, agents, and manufacturer-owned wholesalers.
- Wholesalers face challenges such as thin margins and digital disruption, but remain vital in global distribution channels due to their efficiency and scale.
Who is a Wholesaler? Definition and Meaning of Wholesaling
A wholesaler is a business or individual that purchases large quantities of goods directly from manufacturers, producers, or suppliers and resells them in smaller quantities to retailers, other wholesalers, or business users.
The practice of buying in bulk and reselling in smaller lots is known as wholesaling. It allows products to move through the supply chain efficiently, bridging the gap between production and retail.
Key Characteristics of Wholesaling
- Purchases goods in bulk, often at discounted rates
- Resells in smaller lots without significant alteration of the products
- Primarily serves retailers, distributors, and business buyers, not end consumers
- Plays a crucial role in reducing transaction costs between producers and retailers
Wholesaling at a Glance
| Feature | Wholesaler | Retailer | Distributor |
|---|---|---|---|
| Primary Customers | Retailers, business buyers | Final consumers | Wholesalers, retailers |
| Transaction Size | Bulk quantities | Small units | Bulk, often with exclusive rights |
| Role in Supply Chain | Middle link between producer & retailer | Final link before consumer | Connects producers with wholesalers |
| Price Level | Lower unit prices (wholesale price) | Higher unit prices (retail price) | Negotiated with exclusivity premiums |
This table highlights the unique position wholesalers occupy in global trade, distinct from both retailers and distributors.
What Does a Wholesaler Do?
Wholesalers perform essential functions that keep goods flowing from manufacturers to retailers. Beyond buying and reselling, they provide services that reduce costs and risks for both producers and retailers.
Breaking Bulk
Wholesalers purchase goods in large shipments and divide them into smaller lots for retailers.
This makes products accessible to small and medium-sized retailers who cannot afford bulk purchases directly from manufacturers.
Storage and Inventory Management
They store goods in warehouses, taking on the costs and risks of holding stock. This ensures that products are available when retailers need them, reducing shortages in the market.
Financing and Credit
In many markets, wholesalers extend credit to retailers, allowing them to pay after selling the products. This supports small retailers who may not have enough working capital.
Transportation and Logistics
Wholesalers often arrange transport, helping retailers access goods without the burden of managing logistics. This reduces distribution bottlenecks and speeds up delivery to markets.
Market Information and Product Assortment
By dealing directly with retailers, wholesalers gather valuable market insights. They pass feedback to manufacturers and also offer retailers a wide assortment of products from multiple producers.
Functions of Wholesalers at a Glance
| Function | Value to Manufacturers | Value to Retailers |
|---|---|---|
| Breaking Bulk | Moves products in large lots efficiently | Allows small orders to meet demand |
| Storage | Reduces need for manufacturer warehouses | Ensures constant product availability |
| Financing | Secures quicker payments | Provides credit to ease cash flow |
| Logistics | Simplifies distribution | Saves retailers transport costs |
| Market Information | Offers demand insights | Helps retailers select the right products |
Wholesalers streamline the supply chain by absorbing responsibilities that would otherwise overwhelm producers and retailers. Their role ensures efficiency, stability, and reliability in distribution.
How the Wholesale Model Works
The wholesale model is built on buying goods in large quantities at discounted rates and reselling them to retailers, distributors, or other businesses at a markup.
It is designed to move products quickly through the supply chain while creating profit margins for wholesalers.
Step 1: Purchasing in Bulk
Wholesalers negotiate directly with manufacturers or suppliers to buy large volumes of goods at a lower cost per unit. This bulk purchase secures discounted prices that retailers cannot access on their own.
Step 2: Storage and Handling
Once goods are purchased, wholesalers manage storage in warehouses until retailers place orders. This ensures continuous product availability without retailers having to hold large inventories.
Step 3: Breaking Bulk and Redistribution
Wholesalers break down large shipments into smaller quantities that fit retailer demand. This allows small businesses to buy manageable lots without committing significant capital.
Step 4: Selling at Wholesale Price
The wholesaler resells products at a wholesale price that is higher than the purchase cost but lower than the retail price. The difference becomes the wholesaler’s margin.
Step 5: Supporting Services
Depending on the market, wholesalers may also provide credit terms, delivery, and product assortment, making it easier for retailers to operate.
Wholesale vs Retail Price Illustration
| Item | Manufacturer Price (per unit) | Wholesale Price (per unit) | Retail Price (per unit) |
|---|---|---|---|
| Example: T-shirt | $2.00 | $3.00 | $6.00 |
| Example: Smartphone Cover | $1.00 | $1.80 | $4.00 |
| Example: Packaged Biscuits | $0.50 | $0.80 | $1.50 |
This table shows how the wholesale model works in practice. The wholesaler earns a margin by selling above the purchase cost while retailers make further profit selling to end consumers.
Types of Wholesalers
Wholesalers operate in different ways depending on the products they handle and the needs of the markets they serve.
Understanding the types of wholesalers helps businesses choose the right partners in their supply chain.
Merchant Wholesalers
Merchant wholesalers are the most common. They take ownership of goods, store them, and sell them to retailers and business buyers.
They earn profit through markups on the products they resell. Merchant wholesalers can be full-service or limited-service depending on the level of support they offer.
Cash-and-Carry Wholesalers
Cash-and-carry wholesalers sell goods to retailers in bulk but require immediate payment. Retailers handle their own transport.
This model is popular in the food and household goods industries where high turnover is essential.
Rack Jobbers
Rack jobbers specialise in supplying and maintaining display racks in retail stores. They often deal in fast-moving consumer goods like snacks, toys, or magazines. The rack jobber owns the inventory until it is sold, reducing risk for the retailer.
Drop Shippers
Drop shippers act as intermediaries without physically holding stock. They take orders from retailers or businesses and instruct manufacturers or suppliers to deliver directly to the buyer. This model is growing in e-commerce.
Agents and Brokers
Agents and brokers do not take ownership of goods. Instead, they facilitate transactions between buyers and sellers and earn commissions.
They are common in industries such as agricultural produce and raw materials.
Manufacturer-Owned Wholesalers
Some manufacturers set up their own wholesale branches or offices. This gives them more control over distribution and helps them reach retailers directly without third-party intermediaries.
Types of Wholesalers at a Glance
| Type of Wholesaler | Owns Inventory | Provides Storage | Provides Credit | Direct Delivery to Buyer | Typical Industries |
|---|---|---|---|---|---|
| Merchant Wholesaler | Yes | Yes | Sometimes | Yes | General goods, electronics |
| Cash-and-Carry Wholesaler | Yes | Yes | No | Retailer’s responsibility | Food, household items |
| Rack Jobber | Yes | Limited | No | Yes | Snacks, toys, magazines |
| Drop Shipper | No | No | No | Yes (from supplier) | E-commerce, specialised products |
| Agent/Broker | No | No | No | No | Agriculture, raw materials |
| Manufacturer-Owned | Yes | Yes | Sometimes | Yes | Industrial goods, machinery |
Wholesale vs Retail: Pricing, Margins, and Unit Economics
Wholesale and retail differ significantly in pricing models, margins, and how profits are calculated.
Understanding these differences helps entrepreneurs make informed decisions about where to play in the value chain.
Wholesale Price vs Retail Price
- Wholesale price is the discounted rate at which goods are sold in bulk to retailers, distributors, or other businesses.
- Retail price is the marked-up rate at which goods are sold to final consumers.
- The gap between wholesale and retail pricing allows both wholesalers and retailers to earn margins.
Margins in Wholesale vs Retail
Wholesalers operate on thin margins but rely on high sales volume. Retailers, on the other hand, work with higher margins but sell smaller quantities.
| Industry | Average Wholesale Margin | Average Retail Margin | Notes |
|---|---|---|---|
| Consumer Electronics | 5% – 15% | 20% – 40% | High competition keeps wholesale margins low |
| Apparel and Fashion | 10% – 25% | 50% – 100% | Retailers often double the wholesale price |
| Packaged Foods | 5% – 10% | 20% – 35% | Wholesale volume is high, margins kept slim |
| Furniture and Home Goods | 10% – 20% | 40% – 60% | Larger items mean higher retail markups |
| Beauty and Cosmetics | 15% – 25% | 50% – 70% | Branding enables higher retail pricing |
Source: Statista and industry trade reports.
Unit Economics in Wholesale
Unit economics is the calculation of profit per unit sold, taking into account costs, margins, and turnover rates. For wholesalers, success depends less on high markup and more on rapid inventory turnover.
Example Calculation:
- Manufacturer price: $2.00 per unit
- Wholesale price: $3.00 per unit (50% markup on cost)
- Retail price: $6.00 per unit (100% markup on wholesale)
Here, the wholesaler makes $1.00 per unit. If they sell 100,000 units in a month, their profit is $100,000, even though the margin per item is small. Retailers make more per unit, but sell fewer units in comparison.
- Wholesalers thrive on volume and efficiency in logistics.
- Retailers thrive on branding, consumer trust, and customer experience.
- Businesses need to evaluate whether their resources align more with wholesale’s scale-driven model or retail’s consumer-focused model.
Wholesaler vs Retailer vs Distributor vs Supplier
The terms wholesaler, retailer, distributor, and supplier are often confused. While they are all part of the supply chain, their roles, customers, and revenue models differ.
Understanding these differences is essential for entrepreneurs deciding how to structure their business operations.
Who is a Supplier?
A supplier provides goods or raw materials directly to businesses. They are often manufacturers or producers who create the products that move through the supply chain.
Who is a Distributor?
A distributor purchases goods from suppliers or manufacturers and often has exclusive rights to sell within a specific region or channel.
Distributors focus on building long-term relationships with wholesalers and large retailers.
Who is a Wholesaler?
A wholesaler buys products in bulk from suppliers or distributors and sells them in smaller lots to retailers or other businesses. Unlike distributors, wholesalers rarely hold exclusivity contracts.
Who is a Retailer?
A retailer sells directly to end consumers in small quantities, usually at higher markups. They are the final link in the supply chain and focus on consumer experience and demand.
Comparison of Wholesaler, Retailer, Distributor, and Supplier
| Role | Primary Customers | Owns Inventory | Pricing Level | Focus Area | Example Industries |
|---|---|---|---|---|---|
| Supplier | Distributors, wholesalers | Yes | Factory or producer price | Production and manufacturing | Raw materials, machinery |
| Distributor | Wholesalers, large retailers | Yes | Slightly above supplier | Regional distribution, exclusivity | Pharmaceuticals, electronics |
| Wholesaler | Retailers, small businesses | Yes | Wholesale price | Bulk sales, storage, assortment | FMCG, apparel, household goods |
| Retailer | End consumers | Yes | Retail price | Direct consumer sales | Supermarkets, boutiques, e-commerce |
Where Wholesalers Sit in Distribution Channels
Wholesalers are a critical link in distribution channels, connecting manufacturers and suppliers to retailers and business buyers.
Their position depends on the structure of the supply chain, which can vary from direct-to-consumer models to multi-level channels.
Zero-Level Channel (Direct-to-Consumer)
Products move straight from the manufacturer to the consumer with no intermediaries. This is common in e-commerce and direct sales. Wholesalers are not involved here.
One-Level Channel
The manufacturer sells to a retailer, who then sells to consumers. Wholesalers are bypassed in this model, but it works well for producers with established retail partnerships.
Two-Level Channel
This is the most common distribution structure. Goods move from the manufacturer to a wholesaler, then to a retailer, and finally to the consumer.
Wholesalers hold inventory, break bulk, and provide services that reduce costs for retailers.
Three-Level Channel
In this structure, a distributor sits between the manufacturer and the wholesaler. The chain flows as: manufacturer → distributor → wholesaler → retailer → consumer.
This model is often used in industries like pharmaceuticals and electronics where distributors hold exclusive rights.
Distribution Channels at a Glance
| Channel Type | Flow of Goods | Role of Wholesaler | Common Industries |
|---|---|---|---|
| Zero-Level | Manufacturer → Consumer | None | E-commerce, direct sales |
| One-Level | Manufacturer → Retailer → Consumer | None | Fashion brands, supermarkets |
| Two-Level | Manufacturer → Wholesaler → Retailer → Consumer | Central role in breaking bulk and storage | FMCG, packaged foods, apparel |
| Three-Level | Manufacturer → Distributor → Wholesaler → Retailer → Consumer | Works with distributors to reach retailers | Pharmaceuticals, electronics |
This table shows how wholesalers fit into different distribution models. While not every channel includes a wholesaler, they remain indispensable in industries that rely on bulk buying, storage, and rapid product movement.
Wholesale Terms to Know
Understanding wholesale terms is essential for anyone working with wholesalers or planning to run a wholesale business.
These terms define how deals are made, how pricing works, and what responsibilities wholesalers and retailers carry.
Key Wholesale Terms Explained
| Term | Meaning | Why It Matters in Wholesaling |
|---|---|---|
| Bulk Buying | Purchasing large quantities of goods at once | Allows wholesalers to access lower unit prices |
| Minimum Order Quantity (MOQ) | The smallest quantity a supplier or wholesaler is willing to sell | Ensures transactions remain profitable for wholesalers |
| Wholesale Price | The discounted rate at which goods are sold in bulk to businesses | Sets the base price for retailers to calculate retail margins |
| Retail Price / MSRP / RRP | The manufacturer’s suggested retail price (MSRP) or recommended retail price (RRP) | Provides retailers with pricing guidance for final consumers |
| Break Bulk | The process of splitting large shipments into smaller lots | Makes it possible for retailers to buy manageable quantities |
| Net Terms (30/60/90) | Payment terms that allow buyers to pay 30, 60, or 90 days after delivery | Helps retailers manage cash flow while securing stock |
| FOB (Free on Board) | Indicates whether the buyer or seller is responsible for shipping costs | Determines logistics responsibility and impacts total costs |
| Markup | The percentage increase a wholesaler or retailer adds to the cost price | Defines profit per unit in both wholesale and retail |
These terms are important because:
- They set the rules of engagement between wholesalers, retailers, and suppliers.
- They help businesses avoid confusion and negotiate better deals.
- They form the foundation of wholesale contracts and supply agreements.
Knowing these wholesale terms ensures clarity in transactions and gives entrepreneurs an advantage when negotiating with suppliers, distributors, or wholesalers.
Benefits of Wholesale
Wholesale plays a vital role in the global economy, providing benefits not just for wholesalers themselves but also for manufacturers, retailers, and consumers.
By lowering costs and improving efficiency, the wholesale model keeps supply chains stable and competitive.
Benefits of Wholesale for Manufacturers
- Moves large volumes of goods quickly
- Reduces the need for manufacturers to manage retail relationships directly
- Provides valuable market feedback from wholesalers and retailers
Benefits of Wholesale for Retailers
- Access to diverse products from multiple suppliers through one wholesaler
- Ability to buy in smaller, manageable quantities
- Credit facilities and flexible terms that improve cash flow
- Reduced storage and logistics burden
Benefits of Wholesale for the Market and Consumers
- Wider product availability at affordable prices
- Reduced transaction costs across the supply chain
- Stability of supply during demand fluctuations
Benefits of Wholesale at a Glance
| Beneficiary | Key Benefits | Impact on Business Growth |
|---|---|---|
| Manufacturers | High-volume sales, reduced distribution costs, faster market penetration | Focus on production efficiency and innovation |
| Retailers | Lower purchase costs, product variety, access to credit, reduced logistics | Greater flexibility and improved profit margins |
| Consumers | Affordable prices, consistent product availability, wide choices | Better access to goods and improved satisfaction |
| Supply Chain | Efficient distribution, reduced transaction costs, smoother product flow | Stronger trade networks and business resilience |
Wholesale is therefore a win-win system. It supports manufacturers by helping them scale, empowers retailers by reducing barriers to entry, and ensures consumers have access to a steady supply of affordable goods.
Challenges of Wholesale
While wholesale creates efficiency in the supply chain, it also comes with challenges that can affect profitability and long-term sustainability.
Entrepreneurs looking to enter the wholesale business must understand these obstacles to manage risks effectively.
Thin Profit Margins
Wholesalers often operate on small markups. With high competition, especially in consumer goods, margins can be squeezed further, making volume sales essential.
Inventory Management Risks
Holding large volumes of stock exposes wholesalers to risks such as damage, theft, or obsolescence. Unsold inventory ties up capital and reduces profitability.
Credit and Cash Flow Pressures
Many wholesalers extend credit terms to retailers. While this supports sales, it also increases the risk of late payments or defaults, which can strain cash flow.
Digital Disruption
The rise of direct-to-consumer and online B2B marketplaces allows some manufacturers to bypass wholesalers. This creates new competition and forces wholesalers to adopt digital solutions.
Regulatory and Compliance Requirements
Import-export regulations, tax compliance, and product safety standards vary across markets. Failing to comply can lead to penalties, loss of reputation, and business closure.
Challenges of Wholesale at a Glance
| Challenge | Impact on Wholesalers | Example Scenario |
|---|---|---|
| Thin Profit Margins | High sales volume needed to stay profitable | Competing on price in the FMCG sector |
| Inventory Risks | Unsold goods and capital lock-up | Fashion items going out of season |
| Credit Pressures | Late payments and defaults from retailers | Small retailers unable to settle invoices |
| Digital Disruption | Loss of traditional business channels | Manufacturers selling directly on marketplaces |
| Compliance Requirements | Fines, penalties, or loss of licence | Importer failing to meet customs standards |
Examples of Wholesalers by Sector
Wholesalers operate across almost every industry, adapting their models to the nature of the products they handle.
Below are practical examples of wholesalers in different sectors and how they serve retailers and consumers indirectly.
FMCG and Grocery Wholesalers
Fast-moving consumer goods (FMCG) such as packaged foods, beverages, and household products rely heavily on wholesalers.
Cash-and-carry wholesalers dominate this space, supplying supermarkets, convenience stores, and kiosks.
Electronics Wholesalers
Electronics wholesalers buy devices and accessories in bulk from manufacturers and distribute them to retailers.
This sector often includes both merchant wholesalers and distributors, with some offering after-sales services.
Fashion and Apparel Wholesalers
In fashion, wholesalers purchase bulk clothing, shoes, and accessories and resell them to boutiques and retailers.
This model allows small retailers to access wide product assortments without direct factory sourcing.
Book and Magazine Rack Jobbers
Rack jobbers are prominent in print media distribution. They supply magazines, books, and newspapers to retail outlets while maintaining the display racks. Retailers benefit by not holding unsold stock.
E-commerce and Online Marketplaces
Digital wholesalers, such as Alibaba and Faire, connect manufacturers with businesses globally.
Drop shipping models are also growing, where wholesalers coordinate shipments directly from producers to retailers’ customers.
Examples of Wholesalers by Sector at a Glance
| Sector | Type of Wholesaler | Key Role in the Supply Chain | Example Model |
|---|---|---|---|
| FMCG & Grocery | Cash-and-Carry | Supplies bulk goods to small and large retailers | Metro Cash & Carry |
| Electronics | Merchant Wholesaler | Buys devices in bulk, distributes to retailers | Ingram Micro, Tech Data |
| Fashion & Apparel | Merchant Wholesaler | Offers seasonal assortments to boutiques and stores | Local apparel wholesale hubs |
| Books & Magazines | Rack Jobber | Stocks and maintains shelves in retail stores | Magazine distribution companies |
| E-commerce Marketplaces | Digital/Drop Shipper | Connects buyers and sellers globally | Alibaba, Faire, Amazon Wholesale |
These examples show how wholesalers adapt their model to industry needs. Whether through physical warehouses or digital platforms, they remain central to efficient product distribution.
The Future of Wholesaling
The wholesale industry is changing rapidly as technology, global trade, and consumer preferences reshape traditional supply chains.
While wholesalers remain central to distribution, their future success depends on how well they adapt to these shifts.
Digital Transformation in Wholesale
E-commerce and digital platforms are redefining how wholesale transactions take place. Online B2B marketplaces like Alibaba, Faire, and Amazon Business allow retailers worldwide to source directly from manufacturers and wholesalers with a few clicks.
Electronic Data Interchange (EDI) and API-driven procurement systems also streamline orders, invoicing, and inventory management.
Rise of Hybrid Models
Wholesalers are increasingly blending traditional bulk sales with modern models such as dropshipping and direct fulfilment.
This hybrid approach helps them remain competitive against manufacturers that bypass wholesalers through direct-to-consumer strategies.
Globalisation and Cross-Border Trade
Cross-border wholesaling continues to grow as businesses seek international markets. Advances in logistics and global trade agreements make it easier for wholesalers to connect manufacturers in one region with retailers in another.
However, this also brings challenges such as regulatory compliance, currency risks, and international tariffs.
Data and Market Intelligence
The future of wholesaling also lies in the use of data. Wholesalers who collect and analyse market trends can advise retailers on consumer demand, helping them stock the right products at the right time.
Data-driven decision-making strengthens relationships with both suppliers and retailers.
The Future of Wholesaling at a Glance
| Trend | Impact on Wholesalers | Example Application |
|---|---|---|
| Digital Platforms | Wider global reach and faster transactions | Wholesalers selling via B2B marketplaces |
| Hybrid Models | Flexibility to compete with D2C | Offering bulk supply plus dropshipping |
| Globalisation | Larger customer base but higher compliance requirements | Exporting FMCG to multiple international markets |
| Data and Market Insights | Improved forecasting and stronger partnerships | Sharing sales trend reports with retailers |
Wholesalers that invest in technology, embrace hybrid models, and use data effectively will not only survive but thrive in the future of global trade.
Conclusion
Wholesalers remain an essential part of global trade by connecting manufacturers with retailers and ensuring products reach markets efficiently.
Despite challenges such as thin margins and digital disruption, wholesalers continue to add value through scale, storage, credit, and logistics.
If you are planning to start or scale a wholesale business, you need the right guidance.
We want to see you succeed, and that’s why we provide valuable business resources to help you every step of the way.
- Join over 23,000 entrepreneurs by signing up for our newsletter and receiving valuable business insights.
- Register your business today with Entrepreneurs.ng’s Business Registration Services.
- Tell Your Brand Story on Entrepreneurs.ng, let’s showcase your brand to our global audience.
- Need help with your marketing strategy? Get a Comprehensive Marketing and Sales Plan here.
- Sign up for our Entrepreneurs Success Blueprint Programme to learn how to start and scale your business in just 30 days.
- Book our one-on-one consulting and speak to an expert about structuring and growing your business.
- Visit our shop for business plan templates and other valuable resources to guide you.
- Get our Employee-Employer Super Bundle NDA templates to legally protect your business and workforce.
- Advertise your business to over a million entrepreneurs through our different advertising packages.
Frequently Asked Questions on Wholesalers
What is the meaning of wholesaling?
Wholesaling is the process of buying goods in bulk from manufacturers or suppliers and reselling them to retailers, distributors, or other businesses at a wholesale price.
It reduces transaction costs in the supply chain and ensures products are available in smaller, manageable quantities for retailers.
Who is a wholesaler in simple words?
A wholesaler is a middleman who buys products in large quantities at low unit prices and sells them in smaller lots to retailers or other businesses. They do not usually sell directly to final consumers.
What does a wholesaler do?
A wholesaler buys in bulk, stores goods, breaks bulk into smaller quantities, and resells to retailers at wholesale prices. They may also provide credit terms, logistics support, and market insights.
What is the difference between wholesale and retail price?
Wholesale price is the discounted rate at which wholesalers sell goods to businesses in bulk. Retail price is the marked-up rate at which retailers sell to final consumers.
The difference between the two ensures margins for both wholesalers and retailers.
What is the difference between a wholesaler and a distributor?
A distributor often has exclusive rights to sell goods in a specific region and usually works closely with manufacturers.
A wholesaler buys from suppliers or distributors and resells to retailers but does not typically hold exclusivity contracts.
Can a wholesaler sell directly to consumers?
In most cases, wholesalers sell to retailers or businesses. However, some cash-and-carry wholesalers or online wholesale platforms may allow consumers to buy directly, especially if they meet the minimum order quantity.
What are the types of wholesalers?
The main types of wholesalers are merchant wholesalers, cash-and-carry wholesalers, rack jobbers, drop shippers, agents and brokers, and manufacturer-owned wholesalers. Each type serves a different role in the supply chain.
What are the challenges of wholesale?
Common challenges include thin profit margins, high inventory risks, late payments from retailers, digital disruption from direct-to-consumer sales, and strict compliance requirements in global trade.
What are the benefits of wholesale?
Wholesalers help manufacturers move goods in bulk, give retailers access to product variety at wholesale prices, and keep products available in markets worldwide. This creates efficiency, affordability, and stability in the supply chain.
Where do wholesalers sit in the distribution channel?
Wholesalers usually sit between manufacturers and retailers in a two-level distribution channel. In some industries, they operate alongside distributors in three-level channels. Their role is to bridge bulk production with retail demand.
