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:

  1. The most common, “merchant wholesalers,” buy in bulk and sell in smaller qualities at a slightly higher price.
  2. “Brokers” do not purchase products but act as intermediaries who negotiate deals.
  3. “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.