Wholesale trade what is

Reviewed by Annapoorna Updated on Nov 11, Wholesale trade is a mode of exchange in which products are purchased and processed in large quantities and sold to resellers, specialist users, or companies, but not to end customers, in batches of a specified quantity. Wholesaling applies to all transactions in which goods are purchased for resale, manufacture of other products, or general business.

Wholesaling is an essential aspect of a company's marketing distribution strategy because it includes industrial customer-related preparation that needs to sell its goods to distributors, retailers, government agencies, colleges, hospitals, and other wholesalers.

Since wholesalers are in the business of buying large quantities and distributing smaller amounts to consumers, they can more effectively carry out physical distribution operations, including material handling, warehousing, and inventory management. These also provide, if needed, fast and regular pick-up and delivery, allowing both the product producers and wholesale buyers to escape the risks associated with holding extensive inventories.

There are different types of wholesalers, such as merchant wholesalers, traders, distributors, contract dealers, distribution branches and offices for manufacturers. Wholesalers help retailers by assisting them in pricing and marketing in their overall integrated market planning. Since they enter into distribution contracts with a manufacturer, and because they can sell different quantities of the commodity to distributors, wholesalers serve as an extension of the workforce of the company.

That way, you have more financial freedom to grow your business. Related: Management Skills: Definition and Examples.

Here are some examples of wholesale activities to deepen your understanding of the process:. There are several wholesale companies that stock retail-ready adult and children's wear from fashion houses. Some stock bulk fabrics and sell to retailers who then sell to fashion designers and other consumers. Others sell a wide variety of fashion items, including bags, footwear, jewellery and cosmetics, among others. Wholesalers in the manufacturing sector can stock everything from machinery, feedstock, components and a wide range of other materials used in the production process.

You can find this type of wholesalers in several industries, including agriculture, food, chemicals, defence, textiles and many others. These wholesalers are important for the operations of manufacturers and typically specialise in one field.

Find jobs. Company reviews. Find salaries. Upload your resume. Sign in. Finding a Job. What is wholesale trade? How does wholesale trade work? Order fulfilment. Networking and relationship building. Why is wholesale trade important?

Transfer of goods to market. Satisfaction of needs. Provision of storage facilities. Gathering of useful information. Maintaining uninterrupted supply. Stabilisation of prices. Why you should invest in wholesale trade. Improved brand image.

The principal types of establishments included are: Merchant wholesalers; sales branches and sales offices but not retail stores maintained by manufacturing enterprises apart from their plants for the purpose of marketing their products; agents, merchandise or commodity brokers , and commission merchants ; petroleum bulk storage , assemblers, buyers , and associations engaged in cooperative marketing of farm products.

The chief functions of uses in wholesale trade are selling goods to trading establishments, or to industrial, commercial, institutional, farm and professional; and bringing buyer and seller together. In additional to selling, functions frequently performed by wholesale establishments include maintaining inventories of goods; extending credit ; physically assembling , sorting and grading goods in large lots , breaking bulk and redistribution in smaller lots; delivery ; refrigeration ; and various types of promotion such as advertising and label designing.

Sample 1. Sample 2. This is a business where goods and services are sold in huge bulk to the retailers and other industrial persons. The business which sells goods and services in smaller lots to the end users they are known as the retail trade. Creates Link between.

They create links between manufacturers and retailers. Wholesaler and Customer forms the link. Less Competition. Tough Competition. Volume of Transaction. Large volume. Small Volume. Basis of Comparison Wholesale Trade Retail trade Meaning This is a business where goods and services are sold in huge bulk to the retailers and other industrial persons.

Creates Link between They create links between manufacturers and retailers.