The,Things,You,Should,Know,Abo business, insurance The Things You Should Know About Wholesaling

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In the world of business, wholesalershave played a very major role in the distribution process of productsfrom manufacturers to retailers. But what are wholesalers? What doesit do to help in easing the process of product distribution?Key Roles of WholesalingWholesaling is a B2B or business tobusiness type of industry that works directly with other businesses.Wholesalers are responsible in overseeing the distribution process ofproducts from its manufacturer to a retailer. This is mainly done bythe wholesalers' list of trusted contacts that are willing to selltheir products.Wholesalers mainly get their profit bybuying products from manufactures, repacking them, then sell it at aprofit to retailers. Lets take for example a wholesale clothingbusiness. Manufacturers would eventually want a fast way ofdistributing their stock on a wider basis. Wholesale clothingbusinesses could make this happen because of their connections with anumber of retailers that are willing to do business with them.This way, they can earn more by sellingmore. This business process that wholesalers undertake provided someadvantages and benefits for both the manufacturer and the retailer.Benefits from WholesalersMany establishments benefit greatlyfrom wholesale businesses. Manufacturers benefit from a wholesalerbecause wholesale businesses open up new market possibilities forthem. This is because of the wholesalers' list of retailers.Manufacturers can have their products purchased and made availablefor sale across a wide number of retail outlets.More importantly, for a companyoffering a new product, convincing a few wholesalers to stock a newproduct may make it easier to gain traction in the market as thewholesaler can have power with the smaller retailers convincing themto stock the new product.Retailers can also benefit from awholesaler in terms of access to products. Wholesalers are inbusiness to provide products and services to retailers who eithercannot purchase directly from suppliers because their purchasequantities are too low to meet the supplier’s minimum orderrequirements or, if they purchase directly from suppliers, will payhigher prices compared to bigger retailers who obtain better pricingby purchasing in greater quantities.Because wholesalers sell to a largenumber of different retailers, their order quantity can be easilysupported by the wholesaler thus allowing them access to theseproducts. In this way transacting through wholesalers is often theonly way certain retailers can stay in business. These are only some of the reasons whymany choose a wholesale business rather than a retail. Though thiskind of business is more profitable than retail, the business processitself requires more experience in maintaining and handling.The Wholesaling ProcessBeing a B2B or Business to Businesstype, wholesaling greatly differs from a retailer. But there may beother similarities found between each. Wholesaling involves adistribution process similar to that of retailers in that customersmay or may not visit the wholesalers' location.Some wholesalers are considered asstationary and some are mobile. The stationary type of wholesalersare the most common of all. These kinds of wholesaler are more on thefixed facilities where product handling operations take place. Thiskind of wholesaling involves two kinds of operation, one is wherecustomers visit the location itself, and the other is not.A wholesaling business is customeraccessible if customers are allowed to visit the location and buytheir products on spot. This is good if the business doesn't supportany shipping policies because the buyers are responsible for makingtheir own arrangements to transport their purchases. A wholesaling business is not customeraccessible is the business doesn't allow customers to visit theirlocation. These wholesalers do their business mainly on the phone oronline where buyers could easily pick and choose what they want tobuy, particularly the wholesale clothing businesses that tookadvantage on this. But this would require the wholesaler to provideshipping.Non-Stationary wholesaler are thosewholesale businesses that doesn't carry any inventory. These types ofwholesalers are those that acts as agents instead of merchants. Somewholesalers do not have physical locations that store products.Instead, these operations rely on others, such as delivery companies,to ship products from one location to the buyer’s place ofbusiness.The Comings and Goings ofWholesalingThough the business itself promisessuccess on the hands of an experienced business man or woman, thereare still some factors that impedes a wholesaler to reach its successin the industry. One of its most dire problems is Disintermediation.In economics, disintermediation is theremoval of intermediaries in a supply chain, or “Cutting outthe middleman”. Because of the revolution of the internet forbusinesses, some manufacturers have come to use this technology to dotheir business. By this, retailers can easily get their stocksstraight from the manufacturer without added costs.Other problems faced by wholesalers isthe location of the business, costs of transportation, newtechnologies, and offering non-product assistance.Location of the business is important,especially for those wholesalers that are only starting out. Settingup a business too far away from buyers and manufacturers may leadthem to costly and expensive shipping.Cost of transportation works in tandemwith the location of the business. Too far away from the manufacturerand retailers could cause a lot of expenses in shipping andtransportation. This may become a big problem especially that thecost of shipment will be passed down to the retailers.New technologies may help wholesalerswith their business processes, but these also added some strain onsome wholesalers. New technologies, such as radio frequencyidentification tags (RFID) placed on shipped products allowwholesalers to maintain tighter control over their distributionactivities. But gaining the benefits associated with these newdistribution technologies can be expensive in terms of acquiring andlearning to use.Selling products to retailers,particularly those newly released products, may require some trainingon how the product should be used. These value-added services mayinvolve employee training, promotional support, and assistance inmanaging their operations. Communication with customers is veryimportant. Which added a new expense for the wholesaler.