What Is A Wholesaler?

What Is A Wholesaler?
Wholesaling is that ultimate, direct source to purchase
from the manufactures before the products are distributed
to other concerns, usually for reselling purposes. Buying
wholesale is to buy at the lowest price you can get for
something. But wholesalers are much more than that.

Wholesale warehouses are the distribution centers to
retailers as well as industrial, institutional and
professional users. Wholesalers purchase in bulk, then
distribute in bulk to these concerns and others at a
discount because their customers are buying in mass
quantities. This affords everyone a better price when
buying from a wholesaler. A wholesaler could be considered
to be an original link in the supply chain of a
distribution network.

Wholesalers are usually very large organizations that hold
large quantities of stock. A wholesaler's money comes from
the large bulk they sell instead of the price per actual
unit of each individual piece. Most wholesalers will impose
a minimum quantity that can be bought at a set price. They
charge what is called "trade price".

Trade price is not a constant, however. Trade price is used
to set prices that can go up or down, depending on the
quantities purchased. A retailer might buy a bulk quantity
of Yoyo candy bars at 20 cents a piece when buying a bulk
of 250 pieces. Another retailer could buy Yoyo candy bars
at 15 cents a piece by purchasing a bulk of 500 of these
same candy bars. Both companies paid at trade prices,
though.

Trade price is often negotiated by the abilities of one
customer purchasing vast amounts of bulk through the
wholesaler throughout the year or in larger amounts. A
company that will give the wholesaler more steady business
through the year will certainly have a better set "trade
price" agreement worked out with them than someone else
that only buys a few bulk items a few months out of the
year.

Some wholesalers these days are also drop shipping for
their customers. This is great for the customer when they
do not have to take care of this type of service for
themselves any more.

A few years ago, it was difficult to find any wholesalers
that would drop ship for their customers. Today, things are
different with competition for every dollar that's out
there. More wholesalers than before will provide drop
shipping to their customers. Some wholesalers don't
advertise this service, but when asked to drop ship, they
will. Ask first before making any assumptions because there
are still several wholesalers that will not drop ship.

Of course, there is added cost for drop ship servicing, but
the wholesaler that provides drop shipping takes this
burden off of the customer's shoulders. Most often, it will
be cheaper to have a wholesaler provide this service than
the business had to pay to have this done themselves.

A lot of smaller home business are getting into the act
now. Finding wholesalers that will work with these type
business can take some time to research. It can be hard to
find a good wholesaler for your small business if you are
not knowledgeable about what to look for.

Wholesaler source businesses are springing up more and
more. These companies will do the research for small home
based businesses and match them up to wholesalers that fit
their needs and provide drop shipping service. The price
for outsourcing a wholesaler source company can seem
expensive, but reasonable when you consider the time it
could take you to find the right wholesaler. Average price
is around two hundred dollars per lifetime membership to
join a wholesaler source company.

Even with the advent of retail discount clubs like Costco
and Sam's Club, there are still networks of individuals
that create a business for the single purpose of getting a
good "trade price" from a wholesaler company.

This type of group is usually a network of consumers that
have joined together to realize the deepest discount prices
on products possible. This is a consumer co-op type
business that's express purpose is to create enough buying
power within the group, so each member can realize a larger
savings when buying in bulk from wholesalers.

Overall, wholesalers help keep the economy alive and busy.
Without wholesalers, it would be hard to imagine how the
world we live in would function without it. They are the
root source from which almost everything our society
depends on to live the way we do.

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