What Is Wholesaler?

What is Wholesaler – Wholesaler is an intermediary between producers and retailers. Wholesalers get or buy products in large quantities at lower prices from producers and sell them to retailers (retailers) or retail companies. Retailers who buy goods from the wholesaler will resell to end consumers or for other business purposes.

In its definition, Wholesaler can also be said as a trader or a person whose business is to buy goods in large quantities and sell them in smaller quantities, for example, to shop or e-commerce traders.

Also read: Understanding Retail (Retail) or Retailers and Retail Functions.

Understanding Wholesaler according to Experts

To be more clear about Wholesale, here are some definitions and definitions of Wholesale according to Experts:

Understanding Wholesalers or according to Irma Nilasari and Sri Wilujeng (2006: 139) , Wholesalers (Wholesalers) are intermediaries traders who are bound by trade in large numbers and do not serve sales to end consumers. Wholesalers buy goods to resell to other traders.

The Wholesaler according to Basu Swastha (2000: 202), Wholesaler is a business unit that buys and resells goods to retailers and other traders or to industrial users, institutional users, and commercial users who do not sell in the same volume to the end consumer.

How to Wholesaler Get Profits?

The way for wholesalers to get profit is from the price difference between the price of goods purchased from the producer and the price of goods sold to retailers. Wholesalers buy products from manufacturers at lower prices because they can receive discounts for purchases in large volumes or quantities. These wholesalers make money by selling these products to retailers or retailers at prices higher than the prices they pay to producers, but still at prices lower than retailers can get directly from producers.

For example, a retailer who buys 100 calculators per month to sell in his store may have to pay $ 100, – per calculator to buy directly from the manufacturer. If the calculator sells for $ 120,000, – retailers only earn $ 20,000 as profit per calculator.

However, wholesalers who buy 50,000 calculators a month from the same manufacturer can negotiate a better price of around $40 per calculator. If the wholesaler sells the calculator to the retailer for $80, – the wholesaler will earn $. 40 from the calculator. The retailer buys a calculator from the wholesaler and sells it to a consumer for $ 120. The retailer will get a profit of around $ 40, – the retailers will get a higher profit if they can negotiate the price to the manufacturer the wholesaler do to get a cheaper price, but the problem is must buy in large numbers.

The above example is a simple example that in practice there may be other factors involved in it such as sales, purchases, product distribution, and so forth.

  • Business partners: Product supply chains between wholesalers and producers can vary depending on the type of business they want to handle. Wholesale traders can choose to only deal with business people who are able to buy a certain amount or volume of merchandise or sign a contract to supply goods for a certain period of time.
  • Product distribution: Another factor is how the product is distributed. Wholesalers don’t just sell the products they receive from the manufacturer to the next retailer. Some wholesalers break up products into smaller units, which are then sold to different retailers. In addition, the collection of products or goods is also considered as part of the wholesale process.

Leave a Comment