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Let's start from scratch - What does wholesale mean?

Updated: Jan 18

OK. If you follow my company, you probably even produce some products. But where do you sell them? Only to final clients? Or do you try to gain more interest with resellers and build, in this way, a bigger scale for your business?

Let’s start today from the beginning and let’s see what exactly wholesale means.

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Where to resell items

The term "wholesale" holds significant weight in the business world, especially for manufacturers, distributors, and resellers. But what exactly does it mean, and why is it a crucial aspect? In this blog post, I'll explain the concept of wholesale, exploring its definition, benefits, and the pivotal role it plays in the product supply chain.

Wholesale, Wholesale, but what does it mean!

At its core, wholesale refers to the sale of goods in large quantities, typically to retailers or other businesses rather than individual consumers. This business-to-business (B2B) model involves the bulk purchase (but not always!) of products at a reduced per-unit cost, allowing retailers to stock and resell those products at a profit.

Basic Key Players in the Wholesale Game:

Manufacturers (yay, probably it’s you!)

  • Manufacturers are the originators of products, creating them on a large scale (at least this is how it should be). Wholesale transactions often start at this level, with manufacturers selling products in bulk quantities to distributors or wholesalers.


  • Distributors or wholesalers act as intermediaries between manufacturers and retailers. They purchase products in large quantities from manufacturers and then distribute them to retailers or other businesses.


  • Retailers are the final link in the wholesale chain. They purchase products from wholesalers and sell them to individual consumers. Retailers can range from small local businesses to large chain stores.

It's your decision if you sell your items to a wholesaler (one strategy of business) or directly to the resellers (another strategy of business). Both of these methods are correct. But each of them has a different dynamic.

OK, but where do you earn money here!

Cost Savings:

  • Wholesale transactions offer cost savings due to the bulk nature of the purchases. The per-unit cost is generally lower when products are bought in large quantities. However, you earn more because the scale should be bigger!

Efficiency in Distribution:

  • Wholesalers streamline the distribution process by consolidating products from multiple manufacturers. This efficiency benefits both manufacturers and retailers, ensuring a smooth flow of goods.

Market Reach:

  • Wholesale allows manufacturers to reach a broader market through the distribution network of wholesalers. This expansive reach can lead to increased brand visibility and sales. Not only that! Resellers investing money in marketing help you to build your brand awareness in the market.

Profitability for Retailers:

  • Retailers benefit from wholesale transactions by acquiring products at a lower cost, enabling them to set competitive retail prices and achieve healthier profit margins.

In essence, wholesale transactions serve as a catalyst for business growth, connecting manufacturers, distributors, and retailers in a symbiotic relationship. Whether you're producing goods, distributing them, or selling to end consumers, understanding the dynamics of wholesale is key to navigating the intricate web of modern commerce.

It's a concept that not only drives efficiency in the supply chain but also opens doors to broader market opportunities, making it an indispensable aspect of the global business landscape.

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