The existence of a product requires a lot of processes. It starts with the purchase of raw materials to processing and ends with branding and packaging. However, a product does not end in the manufacturers’ store; it needs to move to the hand of the consumers. The process of moving goods from the manufacturer firm to the consumers involves wholesale and distribution.
What is Wholesale?
Wholesale can be defined as buying products in bulk from the distributor or manufacturer, storing these products and reselling them to retailers or other people who may need these goods. In wholesale business, goods are purchased at a lower price and sold to others at a higher price with the inclusion of the wholesaler margin.
What Is Distribution?
This is the act of making goods or products available for everyone that needs them. It is not a job for a particular person; distribution can be done by the producer, employees, or an intermediary. Distribution is one of the elements of the marketing mix. It is core for every business that must lead; the distribution process requires adequate time to plan strategically. Every distribution channel must impact and improve the consumer.
Differences Between Wholesale & Distribution
Both wholesale and distribution perform similar services, such as financing customers to buy products, technical support, delivery, and storage.
However, they are different from one another, notable differences include:
The wholesale and distribution business get products from different sources. A wholesaler purchase product from the distributor while the distribution business derives its products from the manufacturer. This means the distributor is ahead of the wholesaler in the supply chain. In most cases, the wholesale never get a particular good if it has not arrived in the distributors’ warehouse. Sometimes, a wholesaler may go directly to the manufacturer, but this does not dispute that the distributor has a higher role in the supply chain.
A distribution business performs some of the roles played by the wholesale, but the difference is that they also educate resellers and give information about new products. The wholesaler just ensures they meet the demands of the retailer; they don’t care about the abilities of the retailer or their knowledge about the market and product. Once the good is passed to the retailer, their job is done. They don’t educate retailers like the distributors.
The wholesaler has no obligation to represent the manufacturer or the goods; their sole responsibility is to ensure the goods get to the retailer, while the distributor has the duty to receive orders, advertise and ensure the growth of manufacturer products. They also act as a sales representative, source for orders, manage profit, and execute orders.
A wholesale and distribution business is vital for the growth and success of every company; they are distinct from one another and should not be categorized as the same. Allow each of them to perform their responsibilities; they are both important and must not be ignored.