Concepts of Wholesale

Wholesale trade

This is the trade which involves the buying of goods in large quantities from manufacturers and selling them to other traders i.e. retailers rather than consumers.

A wholesaler is the person who buys goods in bulk from manufacturers and sells them to retailers. The main role of a wholesaler is "bulk breaking" i.e. buying goods in large quantity and selling them in relatively small quantities to retailers.

Broad features of a wholesaler

1. Is neither a producer nor retailer but acts as a link between the two i.e. producer and retailer.
2. He generally specializes in the commodities.
3. He doesn't deal directly with consumer but sells through retailer.
4. He requires huge capital to conduct the business.
5. He buys in bulk but sells in relatively small quantities to retailers.
6. Usually he keeps his stock of goods in the godown rather than in the shop.
7. He gets profit mainly due to trade discount rebates or cash discount granted by the producers.