Wholesaling or distributing is the sale of goods or

merchandise Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more i ...

to retailers; to

industrial Industrial may refer to: Industry * Industrial archaeology, the study of the history of the industry * Industrial engineering, engineering dealing with the optimization of complex industrial processes or systems * Industrial city, a city dominate ...

, commercial,

institutional Institutions are humanly devised structures of rules and norms that shape and constrain individual behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions a ...

or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In general, it is the sale of

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not tran ...

bulk Bulk can refer to: Industry * Bulk cargo * Bulk liquids * Bulk mail * Bulk material handling * Bulk pack, packaged bulk materials/products * Bulk purchasing * Baking * Bulk fermentation, the period after mixing when dough is left alone to f ...

to anyone, either a person or an organization, other than the end consumer of that merchandise. Wholesaling is buying goods in bulk quantity, usually directly from the manufacture or source, at a discounted rate. The retailer then sells the goods to the end consumer at a higher price making a profit. According to the

United Nations Statistics Division The United Nations Statistics Division (UNSD), formerly the United Nations Statistical Office, serves under the United Nations Department of Economic and Social Affairs (DESA) as the central mechanism within the Secretariat of the United Nations t ...

, ''wholesale'' is the

resale A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit (but can be done at a loss). One example can be found in the ...

of new and used goods to retailers, to industrial, commercial, institutional or professional users, or to other wholesalers, or involves acting as an

agent Agent may refer to: Espionage, investigation, and law *, spies or intelligence officers * Law of agency, laws involving a person authorized to act on behalf of another ** Agent of record, a person with a contractual agreement with an insuranc ...

or broker in buying merchandise for, or selling merchandise to, such persons or companies. Wholesalers frequently physically assemble, sort, and grade goods in large lots, break-bulk, repack, and redistribute in smaller lots. While wholesalers of most products usually operate from independent premises,

wholesale marketing The consumption and production of marketed food are spatially separated. Production is primarily in rural areas while consumption is mainly in urban areas. Agricultural marketing is the process that overcomes this separation, allowing produce to b ...

for foodstuffs can take place at specific wholesale markets where all traders are congregated. Traditionally, wholesalers were closer to the markets they supplied than the source from which they got the products. However, with the advent of the internet and

e-procurement E-procurement (electronic procurement, sometimes also known as supplier exchange) is the business-to-business or business-to-consumer or business-to-government purchase and sale of supplies, work, and services through the Internet as well as oth ...

there is an increasing number of wholesalers located nearer to the manufacturers in China,

Taiwan Taiwan, officially the Republic of China (ROC), is a country in East Asia, at the junction of the East and South China Seas in the northwestern Pacific Ocean, with the People's Republic of China (PRC) to the northwest, Japan to the nort ...

, and Southeast Asia. The profit margins of wholesalers depend largely on their ability to achieve market competitive transaction costs. In the banking industry "wholesale" usually refers to

wholesale banking Wholesale banking is the provision of services by banks to larger customers or organizations such as mortgage brokers, large corporate clients, mid-sized companies, real estate developers and investors, international trade finance businesses, ins ...

, providing tailored services to large customers, in contrast with

retail banking Retail banking, also known as consumer banking or personal banking, is the provision of services by a bank to the general public, rather than to companies, corporations or other banks, which are often described as wholesale banking. Banking servi ...

, providing standardized services to large numbers of smaller customers. In real estate, wholesaling is the act of contracting to purchase real property, and assigning that contract to an investor.

Taxes

Often, in the United States, wholesalers are not required to charge their buyers

sales tax A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a govern ...

, if the buyer has a resale license in the state the wholesaler is located. Out-of-state buyers are not charged sale tax by wholesalers.

Direct selling

The alternative to selling wholesale to distributors or retailers is to sell retail either through company-owned stores or

online In computer technology and telecommunications, online indicates a state of connectivity and offline indicates a disconnected state. In modern terminology, this usually refers to an Internet connection, but (especially when expressed "on line" or ...

. Advantages include receiving a larger slice of the price paid by the consumer; disadvantages include difficulty in reaching consumers. Direct selling is a business model wherein sellers sell the goods directly to the end customer.

References

{{Authority control Freight transport

Taxes

Direct selling

See also

References