What is wholesale?
Wholesale is a business model where a company buys products in bulk from a manufacturer or authorized reseller at a discounted price and sells them to other businesses.
Wholesalers focus on buying, storing, and distributing products rather than manufacturing them, helping retailers stock items at competitive prices.
How are wholesale products distributed?
Wholesale products are distributed through a supply chain that typically involves manufacturers selling in bulk to wholesalers, who then resell to retailers or directly to businesses. Distribution can happen through warehouses, distribution centers, or direct shipping, ensuring products reach stores or end buyers efficiently.
Advantages of wholesale
Wholesale offers several benefits for businesses looking to scale, improve profit margins, and strengthen supply chains.
Key advantages include:
- Stable supply since wholesalers often act as intermediaries between manufacturers and retailers.
- Lower unit costs through bulk purchasing.
- Easier scalability because inventory is available in larger quantities.
Types of wholesale
Wholesale businesses generally fall into three categories, each playing a different role in the supply chain.
- Merchant wholesalers – Buy and own products in bulk, then handle storage, distribution, and resale.
- Agents (manufacturers’ representatives) – Represent producers, connect them with wholesale buyers, and negotiate sales, without taking ownership of goods.
- Brokers – Act as independent intermediaries between buyers and sellers, earning commission without holding inventory.
Wholesale pricing explained
Wholesale pricing is the discounted rate manufacturers charge when businesses buy in bulk. These prices let wholesalers buy products for less and sell them for more to make a profit.
Example:
A wholesaler buys 1,000 items for $2,000 ($2 each) and resells them in smaller batches – like 50 units for $200 ($4 each). The $2 difference per item is the wholesaler’s profit.
What is the difference between wholesaler, retailer, and distributor?
Each plays a role in getting products to the end customer:
- Wholesaler – Buys products in bulk from distributors or manufacturers and resells them, usually to retailers.
- Retailer – Sells products directly to the end customer, often at a marked-up price.
- Distributor – Works directly with manufacturers to supply products to wholesalers or retailers.
FAQs
Wholesale pricing is the discounted rate businesses pay when purchasing products in bulk from manufacturers or distributors. This lets them resell at a higher retail price for profit.
Wholesale is typically limited to businesses, retailers, and resellers who intend to resell products. However, some wholesalers and wholesale-style platforms also let individuals buy directly, especially online.
Yes – most wholesalers set minimum order quantities (MOQs) to offer bulk pricing and keep operations efficient.
You can find suppliers through online directories, trade shows, and manufacturer websites, or print-on-demand platforms like Printify that offer bulk discounts.
In eCommerce, businesses buy products in bulk and list them online – either through their own store or marketplaces – to sell at retail prices.