Welcome to the WholesaleForum.com! Sign in or Register Free to benefit from our full range of free services

Welcome to Wholesale Forum.comWelcome ToWholesale Forum.comFind wholesale buyerstrade buyers and wholesale offers free

For Buyers

Wholesale Forum is the fastest growing online business community dedicated to retailers, auction sellers, surplus and overstock buyers needing a quick and safe solution for sourcing trade stock. Join our free and friendly forums today and gain knowledge, offer your advice, and discover new partnership opportunities:

For Suppliers

For wholesalers, dropshippers, manufacturers, distributors and trade services providers. Advertise your business today on WholesaleForum.com for free to reach potential trade buyers on a more personal level. Promote your latest offers, interact with buyers in real time, distinguish yourself as an expert in your field, and attract sales instantly.

Sign up now More benefits for Buyers
Sign up now More benefits for Suppliers
    1. Rocky78 is offline

      Join Date
      Oct 2010
      Location
      United Kingdom
      United Kingdom
      Posts
      175
      Thanks
      0
      Thanked
      11 Times in 6 Posts
      #1

      Why don't wholesalers sell to end consumers - Wholesale selling as Retail

      Long-time lurker, first time poster with an honest question to the forum-- why don’t wholesalers sell directly to the end consumer? That is, if getting the best price means getting as few links in the supply chain between you and the manufacturer as possible, then why not cut out several links and go directly to the wholesaler (at least). What benefit does the retailer give the wholesaler that retailers are tolerated at all?
      Want To Be An eBay Powerseller?
      This is the Service You Need.

    2. lyndonb is offline

      Join Date
      Oct 2010
      Location
      United Kingdom
      United Kingdom
      Posts
      297
      Thanks
      0
      Thanked
      8 Times in 8 Posts
      #2
      To put it simply, retailers are dedicated buying and selling machines, and end consumers are not. There’s a huge amount of cost associated with the obtaining and storing of product, and that cost increases when the wholesaler begins selling in the micro-quantities associated with the general consumer.

      Bulk is best for wholesalers because it keeps the costs of product transportation from being crippling. See, the cost of transporting goods can only be so low, due to courier and shipping firms having minimum costs for engaging their services. Imagine if a wholesaler, instead of using a given firm a couple times a day or so to transport enough stock per retailer, supplied directly to end consumers. You’re talking a hundred more stops at least, and that’s going to make transportation costs unworkable.

      Not to mention selling smaller quantities means slower turnover, which leads to much higher storage costs, and the whole process would require a completely different and larger infrastructure (my ulcer starts to rumble when I think about the inventory management problems!). Honestly, a wholesale-direct model would likely end up with final prices that look an awful lot like retail prices, if not higher, just so the wholesaler could support the increased cost.

      As mentioned, retailers are ideal intermediaries in this regard. Unlike end consumers, they are able to handle the kinds of quantity that even makes a wholesaler’s business possible, and are better to tolerate slower product turnover than wholesalers. Likewise, wholesalers purchase from multiple suppliers and manufacturers, meaning, the buying process is more streamlined for the retailer, but the retailer likewise, purchases from multiple wholesalers, streamlining further.

      Imagine how many different wholesalers you’d need to deal with to make up one trip to Sainsbury’s. Retailers are perfect to fill the niche between wholesalers and end consumers. It’s like magic!
      Over 150,000 Verified Sources + Deals 95% Off MSRP + Free Website!

    3. camguy is offline

      Join Date
      Oct 2010
      Location
      United Kingdom
      United Kingdom
      Posts
      133
      Thanks
      0
      Thanked
      2 Times in 2 Posts
      #3
      Honestly, it’s not been practical to sell directly to consumers since the advent of mass-production over a hundred years ago. Manufacturers create huge numbers of units at a time, and so must shift huge quantities of product in order to show a profit. This requires wholesalers to buy in big bulk amounts. These amounts are large enough that long-term storage is simply unworkable, so the wholesaler has to see quick turnovers in order to make a profit.

      Retailers, on the other hand, are able to store longer and handle slower turnover. Yes, there are manufacturers who sell directly to the consumer, but they are smaller businesses (often cottage industry) who don’t generate the kind of bulk as handled by manufacturers. They also can’t satisfy the kind of demand most products elicit on the general market. See, in order to make sure all of London is kept in supplies of Cadbury’s chocolate, retailers are a required link in the chain.

    4. Rocky78 is offline

      Join Date
      Oct 2010
      Location
      United Kingdom
      United Kingdom
      Posts
      175
      Thanks
      0
      Thanked
      11 Times in 6 Posts
      #4
      What about warehouse stores? They’re wholesalers selling almost retail-style to end consumers, with prices maybe a little higher than what retailers pay for bulk.

    5. lyndonb is offline

      Join Date
      Oct 2010
      Location
      United Kingdom
      United Kingdom
      Posts
      297
      Thanks
      0
      Thanked
      8 Times in 8 Posts
      #5
      Wholesale stores aren’t wholesalers in the traditional sense, that is, they fit into the chain in a place somewhere between traditional wholesaler and retail outlet. They deal with manufacturers via merchandise agents who arrange the shelving and displaying of the products from multiple manufacturers, so there’s still an intermediary involved, just not as much volume. Also, a lot of those wholesale stores are actually wholesale clubs, which charge annual fees for access to the sales floor, and that covers a good bit of the price different to retail.

Sign Up Now

Got something to say? Sign up now and join the discussions.

Similar Threads

  1. Selling branded Clothing - Best place to sell High End Apparel
    By lyndonb in forum Starting & Growing Your Business Discussion
    Replies: 3
    Last Post: 02 May 2011, 01:39 AM
  2. Replies: 3
    Last Post: 13 May 2011, 08:05 AM
  3. Why do some wholesale suppliers also sell at retail?
    By Matildasmom in forum Wholesale Discussion
    Replies: 9
    Last Post: 02 Dec 2010, 01:31 AM
  4. Buying at employee pricing and then selling at retail
    By Newtome in forum Apparel Stock
    Replies: 4
    Last Post: 06 Jun 2010, 10:28 PM
  5. Replies: 7
    Last Post: 27 Apr 2011, 07:23 AM
  6. Replies: 1
    Last Post: 30 Dec 2011, 07:24 AM
  7. Do Wholesalers sell in bulk only - Why do Wholesalers have high MOQ
    By BeckhamSale in forum Wholesale Discussion
    Replies: 3
    Last Post: 28 Apr 2011, 03:13 AM

My Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
All times are GMT -4. The time now is 12:09 PM. - Fixed Width