Wholesale and retail sales are usually confused because both terms are used as if they were the same. People think that they are the same, but they have more differences and similarities. The principal objective of this article is to explain their differences and make you reflect on what is the best option taking into account the aim of your business. It is currently claimed that both sectors are incredibly good to start a new business; however, here you will have the opportunity to learn about these terms, their advantages and their disadvantages.
What is wholesale?
Wholesale is the process of buying products to a manufacturer, the person who creates the object, and selling it to a retailer, the person who sells these products to the end consumer. In other words, the wholesaler acts as a middleman, he is in charge of transport merchandise between the factory and the physic or online store. They normally sell their products in large quantities and they obtain the merchant at lower prices. This is one of the most relevant advantages of buying in bulk; you can get really cheat products buying big packs. The middleman needs to have a storehouse in order to storage all their products. It is important to have an organized inventory. Moreover, there is another type wholesale what is called drop shipping. It means you act also as a middleman but you don’t need to have a storehouse, you just work on prices, shipping and delivery. In drop shipping, the person in charge of storage the merchandise is the manufacturer or another distributor. This is a very advantageous method if you want to save you time and money renting big warehouses.
What are retail sales?
Retail sales are the fact of selling products to the end consumers, the people who are going to use the products for their daily life. This way, we can say that retail sales are the last step of the chain. Retailers are the people who decide what are going to be the prices taking into account the demand of merchant. It is a really important job because they are the last people in contact with the product, then usually consumers just buys them in order to take profit of it.
What is the best option?
According to the description above, both are a useful and necessary step of the consuming process, there are more differences between them than linkers. Wholesalers can get products at lower prices and then they can sell them at also lower prices to retailers. The objective is to sell huge quantities of products. One inconvenient is that a distributor needs to hire or buy a warehouse. Without a warehouse is almost impossible to go ahead with the process. However, there is a new option, Drop Shipping, what is really easy.
Being a retailer has also some difficulties because you need to sell products to particulars. Sometimes, one object is really demand and the next one, it is old-fashioned. For this reason, it is sometimes difficult to calculate how many items you need to buy.
Both parts of the sector are necessary and different. Our advice is to start being a distributor and then set out a real store or something similar. It will be the most appropriate option for a novice. You can get more information at Shopify.