A wholesaler is an intermediary agent between manufacturers or producers and retail companies, whose economic activity is based on the purchase and sale of wholesale products to other wholesale and retail companies.
At the most basic level of the distribution chain, the wholesaler is somewhere between the initial producer of a good or service and the retail company that will eventually put the merchandise on the market for customers to access. This market is called the wholesale market.
It is necessary to indicate that a wholesaler by definition does not establish a relationship that can unite producers of goods and services and clients or final consumers. Its action is limited to operating within the supply or distribution chain as a sales agent, where it establishes its business.
Main characteristics of the wholesaler
The main characteristics of the wholesaler are:
- He always operates in large quantities, both when buying and selling.
- It buys these volumes from initial producers (factories, farmers, ranchers, among others) or other wholesale agents.
- You sell to retailers generally, although you can also sell to other wholesalers and even producers.
- In general, in no case does it relate to the end customer.
- They are basic pillars of distribution chains, as they provide greater organization and speed of transition in them.
In many cases, wholesale companies undertake tasks outside of the purchase and sale itself, since there are cases in which this type of agents also carry out storage, transport and transform goods by labeling, packing or packaging them in order to your next sale.
However, in most cases this is seen as something negative, because being considered as an intermediary agent adds higher costs to the products and, therefore, reduces the degree of profitability that they carry.
Classification of wholesale companies
Taking into account different criteria it is possible to distinguish between different types of wholesaler:
- Because of its origin and location. For example, a Spanish or Mexican wholesaler.
- By markets or sectors in which they provide service. For example, a wholesaler that collects and distributes food.
- If your customers are sporadic or there is a relationship in time or loyalty.
- By the way of sale, which can be remote, self-service or traditional.