Scribd
Upload
1K views

Assignment On Wholesaling

The document discusses wholesaling, including its definition, history, benefits, types, pricing structures, and the differences between wholesalers, distributors, and retailers. It also compares wholesaling to dropshipping. Some key points include: 1. Wholesaling involves the sale of merchandise in quantity to businesses rather than individual customers, allowing manufacturers to access many retailers without marketing directly to each. 2. The main types of wholesalers are merchant wholesalers, brokers, and sales/distribution representatives. 3. Wholesalers purchase products at wholesale prices from distributors or manufacturers and resell them to retailers at marked-up prices to earn a profit.

Uploaded by

William
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
1K views

Assignment On Wholesaling

The document discusses wholesaling, including its definition, history, benefits, types, pricing structures, and the differences between wholesalers, distributors, and retailers. It also compares wholesaling to dropshipping. Some key points include: 1. Wholesaling involves the sale of merchandise in quantity to businesses rather than individual customers, allowing manufacturers to access many retailers without marketing directly to each. 2. The main types of wholesalers are merchant wholesalers, brokers, and sales/distribution representatives. 3. Wholesalers purchase products at wholesale prices from distributors or manufacturers and resell them to retailers at marked-up prices to earn a profit.

Uploaded by

William
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

Assignment On

Wholesaling
Name: Md. Mokarram Hossen
Roll: 22
Batch: 29th
Assignment Submitted To: Rumana Mallik

Introduction
Wholesaling, the selling of merchandise to anyone other than a retail customer. The
merchandise may be sold to a retailer, a wholesaler, or to an enterprise that will use it for
business, rather than individual, purposes. Wholesaling usually, but not necessarily, involves
sales in quantity and at a cost that is significantly lower than the average retail price.

Wholesaling became particularly advantageous after the introduction of mass production and
mass marketing techniques in the 19th century. Without wholesaling organizations, large
manufacturers would have to market their products directly to a great many retailers and/or
consumers at high unit costs, and retailers or consumers would have to deal with a large
number of manufacturers at great inconvenience.

Benefits of Wholesale
 Save Money
By buying products in bulk you can save money through discounts that wholesaling get with
larger orders. This means that you can get products for less while selling them for more.
Depending on how much you invest initially you can get ahead of competitors through buying
and selling in sheer volume.

 Build a Network of Suppliers


Those in wholesaling need a good network of suppliers and manufacturers that they can rely
on. Deliveries must be on time, products must be to a high standard, and relationships
honored, to make sure that business runs smoothly for a wholesaler. This means that supplier
relationships should be positive and well maintained so that your brand is established and
sustainable.
 Become an Expert
Through researching and selling products you become an expert in this field. Whether you are
selling car parts, jewelry, or wedding supplies you gain knowledge in your industry that
customers will come to trust. Use this knowledge to entice more people to your online store
and share information that will help customers make a purchase

 Expand with Ease


Once you have a good foothold on your industry you will start to see connections with other
markets. These connections could be upselling or cross-selling opportunities that can help your
business gain even more success. This expansion will be easy as you have already set up your
brand and established relationships with those offering their products for wholesale. Any new
ventures will be quick and simple compared to setting up.

Types of Wholesale
It can be hard to navigate the wholesaling environment as some wholesalers work
independently, while others work closely with one or two producers. Overall a wholesaling
businesses can fall into one of three categories, or types. These are:
1. Merchant Wholesalers – This is the most common wholesaling types. Merchant
wholesalers engage in purchasing larger volumes of products which they sell in smaller
quantities for a slightly higher price. Merchant wholesalers do not manufacture their
own products but they have in-depth knowledge of products to know when is the right
time to start selling them to retail businesses in different industries.
2. Brokers – Brokers typically don’t own the products they’re selling; they are the
intermediary between a wholesaling operator and their clients. A broker negotiates a
good deal between the two parties and works off a sales commission structure.
3. Sales and Distribution – Instead of relying on wholesaling businesses finding a
manufacturer, a manufacturer could hire people to actively represent them to
wholesalers. This means that a manufacturer will reach out to wholesaling operators to
offer their products to them, creating wholesaling deals that are tailored to individual
cases.
Wholesaling Pricing
A wholesaling pricing is the price a manufacturer charges a wholesaling to bulk order from
them. Because wholesaling is buying in bulk a significant discount can be sought from the
manufacturer making it possible for a wholesaler to make a profit through retail markup.
Retail markup is the pricing on wholesaling products a retailer is charged for a product minus
the wholesaling price of the product. For example, if a wholesaling buys 500 products for a total
of $2,000 each product cost $4. The wholesaler might decide to sell these products in groups of
50 to retailers for $400 per 50 products. The price per product has now increased to $8 per
product meaning that a wholesaler will make $4 profit per product or $2,000 for the whole
shipment. This is what makes wholesaling profitable.

Difference between a Distributor, Wholesaler and Retailer


A product has to come a long way until it reaches a paying customer. Wholesalers, distributors,
and retailers are all middlemen that are featured in the supply chain and make that journey
possible. Each has its own purpose and set of responsibilities that define their role in the
network.
Distributor is an independent agent that enters into an agreement with a manufacturer to sell
their products to wholesalers or retailers. Distributors often face limitations from
manufacturers and are not allowed to sell other product lines or competing products, however,
that often boils down to the type of industry and agreement that’s put into place. Typically,
distributors carry a very large amount of stock and often have the capacity to warehouse goods
for up to a year. Whenever a manufacturer is approached by a potential new buyer, they have
to deal with the chosen distributor that becomes their direct point of contact.
Wholesaler is a middleman that buys in bulk from a distributor and resells at a wholesaling
price to a retailer. Wholesalers can specialize in a certain type of product, such as women’s
shoes, or carry a wide range of stock destined for retailers in various different industries.
Wholesalers who only stock non-competing products are deemed distributors. Besides breaking
bulk orders into smaller quantities, wholesalers can also assemble goods as part of the process.
Wholesalers typically tend to warehouse products for shorter periods of time compared to
distributors, most commonly for up to six months.
Retailers are for-profit businesses that sell directly to consumers for the purpose of
consumption and not resale. To make a profit, a retailer needs to find a wholesaler or a
distributor that sells products at the right price point and in the right quantities. Generally,
retailers make money by purchasing goods from wholesalers in small quantities at a
wholesaling price and reselling them at a relatively high price to cover for advertising costs and
other expenses, such as staff salaries, rent, utility bills, etc.
Wholesaling Vs Dropshipping
Wholesaling is great as it gives you the ability to buy and sell when and where you want to. You
can even choose how to sell your products, so this is a great option for an entrepreneur with
enough startup capital.
A new type of online retailer known as “dropshipper” has become popular among e-commerce
entrepreneurs with little startup capital. A dropshipper is a retailer who doesn’t keep any stock
but earns commission on orders transferred to his wholesaling dealer. The biggest advantage of
this retail fulfillment method is that you don’t need to own or keep the stock you’re selling.
When you receive a new order, you simply pass it on to your wholesaling partner who handles
the product shipping and takes a commission on that. E-Commerce businesses that run on a
dropshipping model are hugely reliant on wholesaling suppliers and need to be strategic about
choosing the right partner.
Both business models are great options but are suited for different entrepreneurs.

You might also like