Wholesale means buying goods from a manufacturer or distributor and selling them to other businesses. The benefits of buying wholesale include saving money, building a network of suppliers, having access to product expertise, cross-selling and upselling opportunities. There are three types of wholesalers:
- The most common, “merchant wholesalers,” buy in bulk and sell in smaller qualities at a slightly higher price.
- “Brokers” do not purchase products but act as intermediaries who negotiate deals.
- “Salespersons and distributors” are independent agents that manufacturers hire to sell their products to wholesalers or retailers (who sell directly to consumers).
In recent years, a new type of online retailer has become very popular: “Dropshippers,” as they are known, hold no stock but earn commissions on orders they send to their wholesaler for fulfillment.