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Wholesale and Distributors

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More About Wholesale and Distributors

Wholesaling can be defined as the sale of goods and services to anyone except the standard customer. Products are sold to retailers and other professional businesses or to other wholesalers. New and used goods are sold without transformation in bulk and distributed in smaller lots to other retailers. Typically, wholesalers are located close to the market where they supply than the manufacturers where they get their products. Wholesale products may range from automotive parts to simple house tools, from arts and crafts to toys, recreational materials to medical.

The distribution of products is done from factory to wholesaler, wholesaler to retailer, and retailer to customer. Goods pass through a chain of intermediaries until it finally reaches the customer. Retail establishments purchase these products in bulk from wholesalers for resale to consumer, but other establishments purchase items for their own use such as equipment, office supplies, and motor vehicles.

Wholesale businesses are important to the national economy of Australia since they simplify the flow of goods and information by acting as intermediaries between manufacturer and customer. Wholesalers may conveniently store goods within its establishments that neither manufacturers nor retailers may store until required by the customers. For the manufacturers, wholesalers provide a wide network of distributors that allow their products to reach the most number of customers. Manufacturers also benefit from some marketing that wholesalers do that manufacturers otherwise would have to perform.

Wholesalers in Australia may come in two types:

Merchant wholesalers that deal in goods that are either durable or nondurable. Durable goods have a typical life expectancy of 3 year or more such as vehicles, furniture, and equipment. Nondurable goods, on the other hand, are those that have less than 3 year lifespans such as food and beverages.

Wholesale electronic markets and agents and brokers these typically arrange for the sale of goods owned by others usually with on a fee or commission basis. They do not take ownership of the goods and make use of the internet to engage in trading.

Advantages of wholesale

Products that are no longer available in regular stores are often available in wholesale and closeout establishments. The cost of the product is reduced because the chain of supply that builds up the retail price is cut short.

Purchasing in bulk helps lower transportation costs and handling fees that are usually incurred when dealing with a retail store. Wholesalers may provide transportation agreements that would allow the goods to skip retailers and avoid any kind of damage.

Wholesalers provide an opportunity for new businesses to lower their startup costs. Establishing a good relationship with wholesalers may provide you with flexible payment options for goods that are unavailable from most retailers thus giving the business owners more options and leeway in operating the business.


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