What are wholesalers and what are their role in business?
We can all name Wholesalers such as Booker, Makro and CostCo. A wholesaler is basically a middleman who provides a link between a manufacturer and a retailer.
Wholesalers buy in bulk from producers and then arrange the products into ‘pallets’, which are quantities that can be sold at a profit to a retailer.
This provides many benefits for the manufacturers. It saves the manufacturer having to make lots of small deliveries to retailers. Instead they can sell to the wholesaler and let them deal with it. Therefore it saves transport/fuel and admin costs.
The manufacturer will also benefit from not having to keep a lot of stock (which in turn saves again on security, space and overheads).
The stock should also not become obsolete or out of fashion if it is sold on regularly and quickly in numbers to the wholesaler.
Some wholesalers also sell directly to customers, missing out the retailer. Others may label goods for retailers as well as packaging them into sizeable quantities for the retailer.
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