A wholesaler buys products in bulk from manufacturers at low prices and sells them in smaller quantities to retailers, who then resell to consumers. This allows the wholesaler to make a profit and gives retailers access to a wide variety of products without dealing directly with multiple manufacturers.
Wholesale Process
To buy from wholesalers, retailers need a reseller permit or business license, ensuring legitimacy as a reseller. Wholesalers have minimum order requirements that retailers must meet, emphasizing the importance of finding the right wholesaler for products, prices, and order sizes that align with the retailer’s business.
Profit Margins and Sales Channels
Wholesalers generate revenue by purchasing bulk inventory at lower costs and marking up prices when selling to retailers, aiming for profit margins of at least 15-20%. While wholesalers can legally sell to the public, focusing on bulk quantities and business customers as their main sales channel is more profitable and beneficial for wholesalers and retailers alike.