What is the difference between wholesalers and distributors in the field of eCommerce wholesale? The answer is a work agreement.
Authorized distributors usually cooperate with related companies. Because of this, many companies have official distributors in various regions. Meanwhile, wholesalers buy products on their own initiative and capital, including in the remarketing process – important link. Thus, wholesale is freer because it is not bound by an agreement with any party.
Is it true that wholesale is still relevant today? Can wholesale be considered a profitable business model? What are the types of wholesalers? Let’s discuss this further.
Wholesaler activities are divided into four business models. Here’s an explanation of the four:
1. Merchant Wholesaler
In this business model, wholesalers (wholesalers) purchase large volumes of products at lower prices. The goal is to resell at a slightly higher price but in a smaller quantity. The difference between the purchase value and the selling value will be the wholesaler’s profit.
2. Agent or Broker
Ever heard of the term broker? Well, a broker who is legal and incorporated is called an agent, broker, or broker. The profits obtained by agents/brokers come from commissions on the sale of goods from wholesalers to consumers. The main task of this agent/broker is actually to assist wholesalers in finding authorized manufacturers or distributors to provide high-quality products at low prices.
3. Manufacturing Distribution Division
In general, this type of wholesale is carried out by the producer company. The goal is to make it easier for companies to control market prices and the distribution of product quantities in the community.
4. Head Office and Retail Branch Offices
This type of wholesale is usually carried out by a retail company that buys a number of products from manufacturers in very large quantities. The goods are then distributed to various branches by setting a certain price.