The Role of the Wholesale Distributor

Only the manufacturers and the retailers know the real importance of the role which the wholesale distributor plays in the whole process of creating the good, and then selling it to the customer. Therefore, it is understood that neither the manufacturer, nor the reseller, or retailer can survive without them.

Now what exactly is it that the wholesale distributor does, which makes them so important in the whole lifecycle of product creation and selling? Simple: They act as the middle party. They buy from the manufacturer, at the lowest price possible, and they resell to the retailer or reseller at a profit, who then sell products at a higher profit. For example, let’s take a can of motor oil. It is manufactured, and then packaged. Then it sold to the resellers who sell it at a profit. Te key player between the manufacturer and the reseller is the wholesaler. They move the product from the manufacturer to the customer. The merchant wholesale distributor will buy the product from the manufacturer, and then store it in warehouses. When needed, (from time to time) the wholesaler will sell the product to the reseller or use it for himself.

According to U.S. Industry and Trade Outlook, published by The McGraw-Hill Companies and the U.S. Department of Commerce/International Trade Administration, wholesale trade includes establishments that sell products to retailers, merchants, contractors and/or industrial, institutional and commercial users. Wholesale distribution firms, which sell both durable goods (furniture, office equipment, industrial supplies and other goods that can be used repeatedly) and nondurable goods (printing and writing paper, groceries, chemicals and periodicals), don’t sell to ultimate household consumers.

Products exist in all shapes, sizes, forms, and types. Anything and everything around us is some sort of product. This indicates that there is a lot of room for growth in this area. As a wholesale distributor, you will perhaps run a separately possessed and operated organization that purchases and puts up for sale products of which you have taken ownership. Normally, such operations are run from one or more warehouses where stocked goods are received and afterwards transported to clientele.

Therefore, as a wholesale distributor, you will be buying goods, but will be selling them as a profit. Put this way, it seems like that is pretty much the same thing which a retailed would do. However, the difference is that a wholesaler does not contact the customer; rather he/she contacts other businesses. Therefore, the wholesale distributor works in a business to business realm, by selling to resellers and possibly other wholesale dealers too. However, this is the traditional definition of a wholesaler. There are many distributors who open for certain hours to serve the general public, so that they too get a chance to buy products at a lower price, i.e. wholesale price, and not retail price. However, in such cases, the public may have to buy products in bulk, and not in selective quantities, like they may do so at resellers. However, the traditional wholesale distributor is still the one who buys “from the source” and sells to a reseller.