Who they are Wholesaler and Retailer? Top 20 Differences – first, know their meaning; Wholesaler – A wholesaler is a company that buys products from manufacturers and sells them at low prices to retailers or other wholesalers. A wholesaler, in the words of S.E. Thomas, “Is a trader who purchases goods in large quantities from manufacturers and sells to retailers in small quantities”. And, Retailer – A retailer is a company that buys products from a manufacturer or wholesaler and sells them to end-users or customers. The primary difference between Wholesaler and Retailer; A person or business that sells goods to the public in relatively small quantities for use or consumption rather than for resale. So, what is the question we are going to discuss; What is the Difference between Wholesaler and Retailer?… Read in Hindi!
Here are explained the Difference between Wholesaler and Retailer.
The following question is answering below;
All consumer goods and products start at the manufacturer. The manufacturer most often designs and produces the product. The manufacturer then sells the finished product to a wholesaler because wholesalers often have relationships with retailers and distribution chains that manufacturers don’t have. The wholesaler, in turn, sells the product to a retailer which can market and sell the product to an end customer.
The term “Wholesaler” applies only to a merchant middleman engaged in selling the goods in bulk quantities. Wholesaling includes all marketing transactions in which purchases are intended for resale or are used in marketing other products. Thus, we can say that a wholesaler is a person who buys goods from the producer in bulk quantities and forwards them in small quantities to retailers.
Retailers are experts in marketing, sales, merchandise inventory, and knowing their customers. They purchase the goods from the manufacturers at cost and market them to consumers at retail prices. The retail price can be anywhere from 10 percent to 50 percent higher than the manufacturing cost. You can think of this as a marketing and advertising fee. Retailers spend millions of dollars on marketing campaigns to help sell the products they carry. These advertising budgets come from the markup on the goods.
One of the main differences between wholesale and retail is at the price of the goods. The wholesale price is always lower than the retail price. This is mainly because the retailer has to include many other costs while selling the goods. The retailer has to add costs like the salaries of employees, rents of shops, sales tax, and advertising of the goods that he buys from a wholesaler. A wholesaler does not worry much about all of these aspects which prompts him to sell goods at a lower price. The wholesaler has direct links with the manufacturer and buys products or goods directly from him.
On the other hand, a retailer has no direct contact with the manufacturer. In choosing the quality, the retailer has an upper hand. A retailer can choose the products with quality and discard the damaged ones as they only buy small amounts. On the contrary, the wholesaler will not have a say in the quality as he has to buy in bulk from the manufacturer.
This means that the retailer has the freedom to choose the products whereas the wholesaler does not have the freedom to choose the products. It can also be seen that retailers have to spend more on maintaining the retail space as they have to attract consumers. On the other hand, a wholesaler need not worry about the space as it is only the retailer who buys from him.
The following 20 Differences below are;
- They are connecting links between the manufacturers and retailers, and They are connecting links between the wholesalers and the customers.
- The purchase goods in large quantities from the manufacturers. And, they purchase goods in small quantities from the wholesalers.
- They deal in the limited number of products, and They deal in a variety of products for meeting the varied needs of consumers.
- They need more capital to start their business, and they can start the business with limited capital.
- The display of goods and decoration of the premises is not necessary for them. And, they lay more emphasis on window display and proper decoration of business premises to attract the customers.
- Their business operations extend to different cities and places, and They usually localized at a particular place, area or city.
- They do not directly deal with the customers, and they have a direct link with the customers.
- They do not extend free home delivery and after-sales services. And, they provide free home delivery and after-sales services to consumers.
- Provide more credit facilities to retailers and they provide lesser credit facilities to the consumers and usually sell goods on a cash basis.
- Wholesalers buy from the manufactures and sell goods to the retailers. And, Retailers buy from the wholesalers and sell goods to the consumers.
Top 20 Difference between Wholesaler and Retailer part two:
The following 20 Differences below are;
- Wholesalers usually sell on credit to the retailers, and Retailers usually sell for cash.
- They specialize in a particular product, and They deal with different kinds of goods.
- They buy in bulk quantities from the manufacturers and sell in small quantities to the retailers, and they buy in small quantities from the wholesalers and sell in smaller quantities to the ultimate consumers.
- Wholesalers always deliver goods at the doorstep of the retailers, and Retailers usually sell at their shops. And, they provide door delivery only at the request of the consumers.
- They may not possess expert knowledge regarding selling techniques. And, they must possess expert knowledge in the art of selling.
- They enjoy the economies of bulk buying, freights and price, etc. and they do not avail such economies.
- Their services can be dispensed with or can be eliminated from the chain of distribution, and they are an integral component of the distribution chain and cannot be eliminated.
- A wholesaler need not provide shopping comforts like luxurious, interiors, provision of air-conditioning, trolleys, etc. And, a retailer usually provides shopping comforts mainly to attract customers.
- As the wholesaler specializes in a particular product, he has to necessarily convince the retailers about product quality. Only then the latter will place an order. And, as the retailer deals in a variety of goods, he need not influence buyers. He can let the buyer choose any brand of the product he likes.
- As per the custom of their trade, wholesaler allows the retailer trade discount each time the retailers buy. And, the retailers normally do not allow any discount to their customers. Some of them may offer a cash discount to bulk buyers. Sometimes, they may offer seasonal discounts.