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Wholesale Definition
There are various types of businesses that operate within a certain business scale. This time, we will discuss a type of large-scale business known as wholesale.
Wholesale is a type of business that sells bulk of products to retailers or smaller scale businesses. Wholesalers act as intermediaries for producers and retailers in the market.
Types of Wholesale Business
There are several types of wholesale businesses :
Merchant Wholesalers
Type of wholesaler who buys directly from the factory. Usually found in the Fast-Moving Consumer Goods (FMCG) industry, agriculture, and private label products.
Full Service Wholesalers
This type of business is responsible for overall retail activities (even up to after-sales service).
Limited Service Wholesalers
Limited-service wholesalers sell products only on certain sales channels, for example through the marketplace.
Broker/agents
Brokers or agents are in charge of connecting transactions between producers and potential buyers. Most often encountered in the housing industry or chemical market.
The Role of Wholesale Business in the Supply Chain
The primary role of wholesalers in the supply chain is to improve supply chain efficiency, as well as to help manufacturers and distributors reach consumers more effectively. No less important, wholesale business also hold other roles, such as:
Large scale collection dan storage of goods
Wholesalers buy goods on a large scale in advance. Wholesalers also hold large amounts of stock to ensure availability for retailers.
Know More About: 5 Tips for Stock Management for Your Business!
Item grouping
After buying various goods from manufacturers, the wholesaler will group them according to unit size and quality, and divide them into smaller lots. Wholesalers provide standardization so that the supply of products is uniform among all retailers.
Market analysis
Wholesalers collect information from retailers about buying behavior, purchasing power, and consumer preference through a market survey.
Price stabilization
After conducting a market survey, the wholesaler will make predictions in preparation for future demand. Wholesalers maintain the availability of goods so that prices remain stable. On top of that, wholesalers help producers to reduce supply chain risks (for example: due to increased demand or damaged goods in the storage).
Read More: Fill Rate: Calculate Your Business Ability to Fulfill Customer Orders
For those of you who run a wholesale business, make sure to be able to play a good role in increasing supply chain efficiency until the product reaches consumers.
Advotics can help you to analyze the buying behavior and surveys automatically and integrated. Find out more about various Advotics products.
