The Nature of the Wholesale Trade Industry

Most of us normally buy everyday goods and necessities from superstores, and other retail outlets. Superstores, gas stations, department stores, different branded products, are some examples of retail outlets. These are called retail outlets because they sell products at retail price, and not wholesale price, meaning, that they keep a certain significant percentage of the selling price as their own profit.

Now, where do these retailers buy their goods from? Naturally, they buy it from wholesalers. Many times, offices and universities also buy goods from wholesalers. This is because they need stationary and other supplies in large quantities, and the best option for them is to buy from wholesalers.

The wholesale trade industry has different sizes and scopes. This is because wholesale products are not limited to a certain item; rather, they apply to almost all the products sold in the world. They sell any and every type of good. Companies which manufacture products may buy their raw materials from wholesalers, for example, a textile production company may buy cotton from one wholesaler, and dye from another. Many times, schools, universities, and offices buy items which are used in abundance in the normal course of their operation, such as stationary, furniture, and so on. Similarly, a departmental store may buy clothing, crockery, and other items in wholesale, and then resell at retail. Wholesale traders may sell one particular item, from one manufacturer, or a particular item from different manufacturers. They may also sell different items from one manufacturer, and different items from different manufacturers. Some wholesalers sell only a narrow range of commodities, such as very specific machine tools; while others sell a wide-ranging goods, such as all the equipment essential to open a new store, including shelving, light fixtures, wallpaper, floor coverings, signs, cash registers, accounting ledgers, and perhaps even some merchandise for resale.

Wholesale trade firms play an extremely vital role in the improvement of economy. They act as the intermediary in the relations between the manufacturing party, and the final customers. The manufacturers sell their product to the wholesalers, who in turn sell to the retailers. Thus, the manufacturer does not need to keep contacts with the different customers; this is taken care of by the wholesaler. They provide services such as customer service, order processing, and technical support, and therefore support the manufacturers. Since they are wholesalers, they usually have warehouses and storerooms where they can keep the products until the customer acquires them. Because of these warehouses, the manufacturers can produce their goods in large quantities, and have the wholesalers store them, and the customer can buy goods in bulk as needed. This means they may store goods that neither manufacturers nor retailers can store until consumers require them. In so doing, they fill numerous positions of the economy. They provide businesses a nearby source of goods made by many different manufacturers; they provide manufacturers with a controllable number of customers, while permitting their goods to reach a huge number of users.