June 25, 2012

Differences Between Wholesaler And Retailer

Introduction

Both wholesaler and retailer are the members of distribution channel. Wholesaler refers to the business entity that buys goods in bulk from producers or distributors and sells to other businesses such retailers. On the other hand retailer purchases goods from wholesalers (sometimes from producers also) and sell them to the final consumers. 

Wholesaler Vs Retailer: Key Differences Explained

The main dissimilarities or differences between wholesaler and retailer can be highlighted as follows:

1. Volume of transaction

Wholesalers purchase and sell goods in large quantity. But retailers purchase goods in large quantity and sell in small quantity to actual consumers.

2. Purchase and sale

Wholesalers purchase goods from producers and sell to retailers. Retailers purchase goods from wholesalers or sometimes from producers and sell them to final consumers. The goods sold by retailers are not re-sold.

3. Specialization

Generally, wholesalers deal in special products. But retailers deal in different goods of different nature, types and quality.

4. Scope

Scope of wholesaling is wide, it remains expended in different cities and villages. Scope of retailing is limited, it remains in local area.


5. Knowledge of salesmanship

Wholesalers needs financial capacity, but need not to be knowledgeable and salesmanship in selling goods. A retailer needs to be an effective seller, should be knowledgeable in selling
activities.

       Also Read:
Meaning And Features Of Retailing                                         


6. Nature of selling

Wholesalers sell goods to retailers, generally, on credit, and retailer makes payment after selling goods to final consumers. Retailer sells goods to final consumers on hand cash, even if sold on credit, it is only for shorter time.

7. Importance of place

For wholesaling, place is not so important, it also does not need to display of goods or decoration of shop to attract customers. But for retailing location of shop is very important, a retailer should be clever, consider and pay much attention to display and decorate shop to attract customers.

8. Storage / Inventory

Wholesalers require more space or warehouse to store large quantity of products. On the contrary retailers do not require large space because of smaller inventories.

9. Investment

As we know that wholesalers buy goods from manufacturers in bulk so they require huge investment than retailers.

Comparison Table

Aspect

Wholesaler

Retailer

Transaction Type

B2B

B2C

Transaction Volume

Large

Small

Profit Margin

Less

High

Investment

High

Less

After sales Service

No

Yes

Marketing Cost

High

Low

Storage Needed

large

Small

Product Range

Fewer

More



Distinction Between Wholesaling And Retailing In Short

* Wholesaling means purchasing large quantity of goods from manufacturers or distributors and selling to other small business. On the other side retailing is to buy goods from wholesalers and buying to ultimate customers.
* Wholesaling requires large capital than retailing
* Retailers enjoy more profit margin than wholesalers
* Wholesalers deal with fewer variety of product line but retailers sales wide range of products
* Wholesalers require large warehouses to store large quantity of goods but retailers do not require large space
* Wholesaling does not require specific knowledge and salesmanship but retailers required these knowledge because they required to deal with the final customers.