Marketing
Retail vs Wholesale
Retail involves selling goods or services directly to consumers in small quantities, often through physical or online stores. Wholesale, on the other hand, involves selling goods in large quantities to retailers or businesses, typically at a lower price per unit. Retailers cater to individual consumers, while wholesalers cater to businesses looking to resell the products.
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9 Key excerpts on "Retail vs Wholesale"
eBook - PDF- Greg Elliott, Sharyn Rundle-Thiele, David Waller, Ingo Bentrott, Siobhan Hatton-Jones, Pete Jeans(Authors)
- 2020(Publication Date)
- Wiley(Publisher)
Wholesaling comprises exchanges in which products are bought for resale, for use as inputs in other products, or for some other use in a business. Wholesaling does not include transactions with end consumers. A wholesaler is simply an organisation primarily engaged in wholesaling. Some organisations do undertake wholesaling and retailing. For example, Sydney Fish Market Pty Ltd is a fresh fish wholesaler, but also has an extensive fresh seafood retail business. While retailing is familiar to most of us, consumers do not usually deal with wholesalers. Wholesaling differs from retailing in that wholesalers deal with businesses. Their marketing mix is geared towards that, so, for example, they generally do not advertise in the mass media or try to site themselves in a fashionable shopping area. They tend to deal in large volumes of product in each transaction. While some wholesalers do deal directly with end consumers, they are usually not set up to handle numerous small transactions. Major wholesaling functions Wholesalers act as the connection between producers and retailers and offer benefits to both. For the producer, wholesalers: • act as a salesforce, promoting and selling its products to retailers • hold and manage inventory, relieving the producer’s warehousing and transport burden • assume the risk when retailers are given products on credit • provide cashflow by paying for and taking possession of inventory shortly after it is produced • communicate producer and market issues to retailers. For many producers, these benefits — and the fact that wholesalers, being specialists, can provide the services more efficiently than the producer can perform them itself — outweigh the financial costs of dealing with wholesalers in the marketing channel. 328 Marketing
- D.P. Warne(Author)
- 2023(Publication Date)
- Society Publishing(Publisher)
Retailers serve their final consumers directly; whereas with wholesaling, the final consumer is served indirectly. Figure 6.1: An image showing a retail shop Source: https://en.wikipedia.org/wiki/Retail The history of retailing dates back to ancient Greece, when merchants would sell their goods from carts or stalls in the marketplace. In medieval Europe, retailing was a common practice among all classes. The first large- scale department stores were developed in England in the 1800s, as well as the concept of shopping on Sundays for those who could afford it. In recent years, retailing has undergone a massive transformation due to technological innovations and changes in consumer behavior. With more people working remotely and online shopping becoming more popular, retailers have had to adapt their business model by offering online sales channels and delivery Managing Retailing and Wholesaling 133 options that allow customers to shop from anywhere at any time, even if they’re not physically in the store (Möller & Halinen, 2018). The history of wholesaling began with farmers who sold their crops in bulk to merchants. The merchants would then sell them at a lower price. The farmers benefited as well because they were paid for their crops before they were even harvested. Wholesaling became more common during the 19th century when railroads were built throughout America. This allowed for faster transportation and distribution than ever before, which reduced costs for consumers. The term “wholesale” comes from this practice of buying and selling in bulk quantities. In Renaissance Italy, wholesalers were called ‘Capitani’ (captains). These captains would travel to other cities and towns to buy up supplies needed by local businesses. Today, wholesalers are still involved in some aspects of retailing, they may purchase goods from manufacturers and then sell them to retailers or other wholesalers.
eBook - PDFConsumer Behaviour NQF4 SB
TVET FIRST
- Sparrow Consulting(Author)
- 2013(Publication Date)
- Macmillan(Publisher)
They sell supplier-owned products primarily to retailers and other wholesalers for a commission or fee. What is a retailer? By this time, you should be very familiar with this term, so we will just quickly review what you already know. Retailing involves selling merchandise (products) and services to consumers for their personal or family use. Figure 11.2 illustrates the concept of the retailing process: Did you know? Research in the USA has shown that sales by manufacturers’ sales branches and agents accounted for approximately 40 percent of all sales by wholesalers. Broker: This is an agent who facilitates bargains and contracts and acts as a middleman or negotiator between two other parties, usually the producer and the wholesaler or retailer. Agent: This is a person or company acting on behalf of another party, not on their own personal behalf; that is, when they buy something, it is bought in the other party’s name. Commission: A fee for work done which is based on a percentage of the amount that is received or collected or agreed upon. Words & Terms Did you know? ‘Retail’ is derived from the French word, retaillier, which means ‘to cut a piece off or to break bulk’. 111 Module 11: Demonstrate an understanding of wholesalers and retailers Figure 11.2: The retailing process. The range of stores in the retail industry Department stores , like Stuttafords, discount stores , like Hi-Fi Corporation and Game, speciality stores , like Sterns Jewellers and Toys R Us, and supermarkets, like Shoprite Checkers and Pick n Pay, are all examples of retail stores. Service providers, like dentists, hotels, hair salons and online stores, like Amazon.com, are also retailers. It may sometimes be difficult to distinguish exactly what type of business it is, for example: • There are businesses, like Makro, that are both wholesalers and retailers, because they sell to consumers and small retailers.
eBook - PDFFashion Wholesaling
From Manufacturer to Retailer
- Linda B. Tucker(Author)
- 2022(Publication Date)
- Bloomsbury Visual Arts(Publisher)
Fashion is handled much like produce; if allowed to sit too long, it spoils. Therefore, a strategy to get the product to market quickly is the key to providing goods where and when needed without compromising the desirability. Fashion retail versus fashion wholesale Although selling occurs at two steps in the overall process (wholesale and retail), there are key differences to understand. In this section, we use the four Ps (Figure 1.4) to distinguish the differences between selling at retail versus selling at wholesale. In both of these selling environments, understanding the target market is essential in efficiently matching a product to the customer. We also define key terminology for each category. the goods, which requires expenditure and financial risk. This process is also time-consuming and costly. This adds to the mark-up making the goods more expensive down the line. In the fashion business, the Traditional Channel of Distribution Model does not work well to get goods to the consumer as quickly as possible. Therefore, the Fashion Channel of Distribution Model puts the traditional wholesale operation outside of the distribution channel but does not omit the function. In this distri- bution model, the sales rep performs the duties of the wholesaler in a traditional marketing chain but does not act as a channel member (i.e. own the goods). In the Fashion Channel of Distribution Model, the wholesale function is FASHION FLOW OF GOODS MANUFACTURER SALES REP RETAILER CONSUMER Figure 1.3 Fashion Channel of Distribution Model. In the Fashion Channel of Distribution Model, the sales rep acts as an agent outside of the distribution channel but does not own or take possession of the goods.
eBook - PDF- William Pride, O. C. Ferrell(Authors)
- 2019(Publication Date)
- Cengage Learning EMEA(Publisher)
Wholesalers support retailers by assisting with marketing strategy, especially the distribu- tion component. Wholesalers also help retailers select inventory. They are often specialists on market conditions and experts at negotiating final purchases. In industries in which obtaining supplies is important, skilled buying is indispensable. Effective wholesalers make an effort to understand the businesses of their customers. They also must now understand digital marketing and digital communications. Firms such as Williams Commerce specialize in helping wholesal- ers to adapt to an increasingly digital environment while maintaining the high level of customer contact that is sometimes required. 38 Wholesalers can also reduce a retailer’s burden of looking for and coordinating supply sources. If the wholesaler purchases for several different buyers, expenses can be shared by all customers. Furthermore, whereas a manufacturer’s salesperson offers retailers only a few products at a time, independent wholesalers always have a wide range of products available. Thus, through partnerships, wholesalers and retailers can forge successful relationships for the benefit of customers. The distinction between services performed by wholesalers and those provided by other businesses has blurred in recent years. Changes in the competitive nature of business, especially the growth of strong retail chains like Walmart, Home Depot, and Best Buy, are changing sup- ply chain relationships. In many product categories, such as electronics, furniture, and even food products, retailers have discovered that they can deal directly with producers, performing wholesaling activities themselves at a lower cost. However, when a wholesaler is eliminated from a marketing channel, wholesaling activities still have to be performed by a member of the supply chain, whether a producer, retailer, or facilitating agency.
eBook - PDF- James Burrow(Author)
- 2020(Publication Date)
- Cengage Learning EMEA(Publisher)
[13.3.1] P o r t f o l i o B u i l d y o u r 13.3 ASSESSMENT Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 372 CHAPTER 13 | Distribution THE ROLE OF RETAILING 13.4 The final business organization in an indi- rect channel of distribution for consumer products is a retailer. Although some large discount retailers sell products to other businesses, their primary customers are individual consumers purchasing to meet their own needs. Retailers buy the products their customers need from man- ufacturers or wholesalers. They display the products and provide product information so that customers can evaluate them. Most retail businesses help customers purchase products by accepting credit cards or providing other credit or financing choices. Many retail stores provide addi- tional services such as product assembly, installation, alterations, repairs, layaway, gift-wrapping, and delivery. In addition to offering products and services for consumers, retailers support the marketing activities of wholesalers and manufacturers. They often finance the inventory by paying the manufacturer or wholesaler before they sell the products Learning Objectives 13.4.1 Define retailing. 13.4.2 Distinguish between various types of retailers. 13.4.3 Describe ways that retailing is changing in response to changes in consumer preferences, the business environment, and technology.
eBook - PDFCommerce
Made Simple
- Geoffrey Whitehead(Author)
- 2016(Publication Date)
- Made Simple(Publisher)
Although we are so familiar with the idea of retail trade, there is still a great deal we need to know before we can fully understand the vital part retail traders play in commerce. 3.3 Definition of Retail Trade Retail trade is that part of commerce where goods are sold to the final consumer. 3.4 Persons Engaged in Retail Trade Not all the people engaged in retail trade are traditional retailers per-forming the full functions of a retailer. There are many wholesalers these days who act as retailers by selling goods direct to the consumer. This is a recent development that took place after the Resale Prices Act of 1976 finally ended Resale Price Maintenance (dealt with more fully on page 63). We also have many manufacturers today who sell to the general public by mail order, or even direct from sales departments in factories. The traditional pattern of the retail trade has changed very greatly in the last 20 years. 44 Commerce Among the different types of retail trader we must include: (a) Small-scale retailers operating as sole traders or partnerships. (b) Large-scale retailers operating as limited companies, and often performing wholesaling as well as retailing functions. (c) Co-operative societies, which are often manufacturers, wholesalers, and retailers. (d) Wholesalers selling direct to the consumer by mail order or through discount-trading schemes. (e) Manufacturers selling direct to the consumer either by mail order or to personal callers who live in the locality. 3.5 The Functions of the Retailer The chief functions of a retailer are: (a) To provide a local supply of goods. (b) To break bulk. (c) To serve the public personally. (d) To prepare goods for resale. (e) To arrange hire-purchase finance. (/) To provide after-sales service. (g) To act as a liaison between the consumer and the manufacturer. The chief points about each of these functions will show the retailer's services to the consumer.
eBook - PDF- Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt(Authors)
- 2018(Publication Date)
- Openstax(Publisher)
Define wholesaling, and describe what wholesalers do. 2. Describe merchant wholesalers. 3. Explain the difference between agents and brokers. 468 Chapter 12 Distributing and Promoting Products and Services This OpenStax book is available for free at http://cnx.org/content/col25734/1.7 Retailing Takes Many Forms Types of In- Store Retailing Description Examples Specialty store Specializes in a category of merchandise and carries a complete assortment Toys “R” Us, Zales Jewelers Convenience store Offers convenience goods with long store hours and quick checkout 7-Eleven, Circle K Supermarket Specializes in a wide assortment of food, with self- service Safeway, Kroger, Winn- Dixie Discount store Competes on the basis of low prices and high turnover; offers few services Walmart, Target Off-price retailer Sells at prices 25 percent or more below traditional department store prices in a spartan environment TJ Maxx, HomeGoods Factory outlet Owned by manufacturer; sells closeouts, factory seconds, and canceled orders Levi Strauss, Dansk Catalog store Sends catalogs to customers and displays merchandise in showrooms where customers can order from attached warehouse Ikea Types of Nonstore Retailing Description Examples Vending machine Sells merchandise by machine Canteen Direct selling Sells face-to-face, usually in the person’s home Avon, Amway Direct- response marketing Attempts to get immediate consumer sale through media advertising, catalogs, pop-up ads, or direct mail K-Tel Music, Ronco Home shopping networks Selling via cable television Home Shopping Network, QVC Table 12.1 Chapter 12 Distributing and Promoting Products and Services 469
eBook - PDF- Richard E. Crandall, William R. Crandall, Charlie C. Chen(Authors)
- 2014(Publication Date)
- CRC Press(Publisher)
Although still a small portion of the total retail business, the potential for B2C selling is vast. With the advent of so many different forms of retailing, it appears that the consumer can not only choose the specific merchandise they want to buy but also choose the way they buy it, pay for it, get it delivered, have it serviced, and finally dispose of it. On the other hand, having a wide variety of choices for some prod-ucts may be a bit of overkill. After all, how many different flavors and sizes of toothpaste do consumers really need? There is another trend to watch for in the future. There is an excess of retail floor space in the United States. As new retail forms emerge, it is likely that some of the existing forms of businesses will cease to exist. Retailing is a very competitive business and it requires the combined efforts of all of the business functions—marketing, operations, and finance—to be successful.
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