A wholesaler typically buys goods in bulk at a lower price from the manufacturer and then resells them to retailers. A distributor works with multiple manufacturers to store and distribute products for sale to customers.
Key Differences between Wholesalers and Distributors
Distributors enter into a contract with the manufacturer for non-competing goods, while wholesalers have the liberty to offer competing products to retailers. Retailers purchase and sell products directly to end consumers using distribution channels.
Target Markets and Operational Differences
- Wholesalers sell to retailers or businesses, while distributors sell to both retailers and consumers.
- Wholesalers offer discounted prices due to bulk purchases, while distributors focus on maintaining relationships for product availability.
- Some businesses can operate as both wholesalers and retailers.
- The distinction between wholesalers and distributors is not always clear.
How to Use "Wholesaler" in a Sentence
The wholesaler offered a discount for bulk purchases.
Choosing Between Being a Distributor or a Wholesaler
A wholesaler typically purchases goods in bulk from the manufacturer, stores them in their warehouse, and resells to retailers. On the other hand, a distributor works with multiple manufacturers, storing and distributing products for sale to retailers and end consumers.
Example of a Wholesaler and Distributor in the Supply Chain
A wholesaler purchases goods in bulk at lower prices from manufacturers and resells them to retailers in smaller quantities. A distributor collaborates with manufacturers, stores and distributes products, and sells to both retailers and consumers.
Understanding the supply chain roles leads to making better business decisions.