Find out what is a wholesaler. It is sometimes also called by the name of distributor and is a significant part in the supply chain. Wholesaler is the one who makes available the products from manufacturers to consumers. The wholesaler takes charge of goods from the manufacturers in bulk quantity and distribute to retail sellers at marked up price.
Due to the presence of wholesaler, consumers get discounts on consumer goods who pay an annual fee to access the items. When consumers make purchases directly from the wholesaler, the prices of products remain very less, but when they head for retail and advertisements, the prices of that particular product goes ultimately higher. A wholesaler serves a range of important functions. They are the middle party to bring factory made products to retail stores who even though with less space manage to make things available to customers. Since space cost money, wholesaler comes in between to manage the products and properly distribute them to the end user.
Wholesalers have their own large warehouses which are specifically designed to store items. This is becomes convenient for the manufacturer and retail stores who don’t have much storage area. Retailers are therefore free to purchase goods directly from wholesalers or distributors in smaller lots than what they can buy from manufacturer. This is how they can manage to buy things the way they can manage.
This is the middleman that helps a factory to fetch good amount of profit by buying goods. In some cases, the scenario is different. A wholesaler may not buy goods from the manufacturer but will store it. In such matters, the wholesaler gets contracts to buy the goods from retailers while getting commission. Wholesalers then sell the goods to retailers while earning the income for storing goods on the storage until they are taken away.
Apart from selling items to retailers, wholesalers perform another task as well – selling to professional groups and institutions. For example, a university require huge stock of paper and for that it will directly buy from distributor for getting a discount. Those who need big stock will buy from wholesaler at discount rate and then sell it in upper price than the actual cost. A wholesaler has much to do other than just these things. Materials can also be sold to other manufacturers for making goods.