What is the difference between wholesaler and retailer?
Sales operations involve wholesale and retail. These two terms tend to confuse people and it is the reason why they use them interchangeably.
The main difference between wholesaler and retailer is that wholesaler are people who buy products in large quantities for reselling purpose to earn a profit whereas retailer is a person who sells products to the final consumer in small quantities.
The article provides a detailed insight into the difference between wholesalers and retailers with a comparison chart for easier understanding.
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What is a Wholesaler?
A wholesaler is an individual who purchases products in large quantities from the manufacturer for reselling purpose to earn a profit.
The go-ahead to break the bulk into comparatively smaller units the repack and resell to the other parties in the market.
What is a Retailer?
A retailer is an individual who sells goods to the final consumers and these products are normally in small quantities. The products are sold at a relatively higher price
Retailers are typically middlemen between wholesalers and customers. Retailers find it hard to retain customers due to stiff competition.
Comparison Chart: Wholesaler Vs Retailer
| Basic Terms | Wholesaler | Retailer |
| Meaning | Individuals who buy products in large quantities for the purpose of reselling to earn profit | Individuals who sell products to the final customers in smaller units. |
| Connect Links Between | Manufacturer and Retailer | Wholesaler and Customer |
| Price of Products | Lower | Relatively Higher |
| Competition | Less | Quite High |
| Volume of transaction | Large | Small |
| Capital Requirement | Huge | Little |
| Deals in | Limited products | Different products |
| Area of operation | Larger | Limited |
| Art of selling | Not necessary | Quite important |
| Need for advertisement | No | Yes |
Core Difference Between Wholesaler and Retailer
- Wholesalers are individuals who buy goods in large quantities for reselling purposes while retailers are individuals who sell goods to the final users in smaller units.
- Wholesalers need a huge capital to get started whereas retailers need a small amount of capital.
- Wholesalers operate in larger areas while retailers are confined in certain areas
- Wholesalers do not engage in promotional activities whereas retailers engage in promotional activities to increase sales
- The art of selling in retailers is quite important while wholesalers are less important
- Wholesalers deals in limited products whereas retailers in wide varieties of products
- Wholesalers engage in a large volume of transactions while retailers in a small volume of transactions
- The level of competition in retailers is quite high while in wholesale is less
- Wholesalers sell products at a lower price while retailers at a higher price
- Retailers have a direct link with customers unlike wholesalers
- Wholesalers offer credit facilities to their customers whereas retailers have lesser credit facilities
- Wholesalers enjoy the economies of buying in bulk unlike retailers who buy in small quantities
- Wholesalers can be dispensed or eliminated in the distribution chain whereas retailers are part and parcel of the distribution chain
- Retailers offer post-sale services to customers unlike wholesalers
- Retailers value product quality whereas wholesalers is hard to determine product quality since they buy in large quantities
Read More: Difference between Wholesale and Distributor
Comparison Video
Summary
The core difference between wholesaler and retailer is that wholesaler buys goods in large quantities for resell to earn profit whereas the retailer sells goods to the end-users in small quantities.
More Sources and References
- Retailing. QuickBooks
- Retailers and Wholesalers. The Balance