You’ve always bought the products from the store. But, have you ever thought about the supply chain process of how these products get to the supermarket’s shelf? If not, you’ll get to learn about it in detail in this article.
You might have heard the terms wholesalers, distributors, and retailers, but you didn’t get what these mean and their differences. Well, that’s one of the most common confusion of many people. You are not alone.
Let’s find out all the differences between them.
A retailer is someone you have come across most of your life. Whenever you go to the market to buy something, you’d be dealing with the retailer. The person selling that delicious chocolate to you is a retailer, and he’s doing a retail business. Not just chocolate, but anything you get from the shops. It includes various items from clothes, foods, equipment, medicines, and anything in between. The list will go on and on as there are many items you can easily get on a retail business.
A retailer is dealing with B2C selling. B2C is short for Business to the customer, meaning he is buying things from various businesses in order to deliver them to the end consumer. And, in this case, you’re the end consumer. The retailers buy from the distributors and the wholesalers. However, it is more common to see retailers buying from them. The reason is that the distributors come to the retailer often. They are looking to sell their products to retailers. On the other hand, if the retailer is looking to get something in large quantity, they would have to go to the wholesaler as the distributors don’t have goods in large quantities.
A wholesaler doesn’t go to different places to sell his products. The retailers would probably visit the wholesaler to get the desired product. One of the best examples of a wholesaler could be a local vegetable market. You might know the process of the supply chain of Vegetables. There is an entire place of wholesalers which is just dedicated to selling vegetables. The retailers usually go over there in the morning to get the complete stock for the day. They would take their vans to load most of the vegetables on them.
On the other hand, suppose I talk about a wholesale cloth market example. You might have observed that some of the wholesalers have just a small shop, and they are selling tons of items from that shop. How’s that possible? Well, they don’t spend much investment on their shop because most of the people buying from their shop are wholesalers. They have a huge warehouse near their shop to keep all the items on their shop stocked up. And, if the retailer asks for the item in a large quantity that is not available in the shop, then the wholesaler would get the products from the warehouse within some time. The wholesaler either does Business to Business and Business to Customer sales. Moreover, a wholesale distributor is responsible is buying goods in large amounts and then selling them to the eCommerce business or the retailers.
A distributor is someone who picks up the products from the Manufacturers and then distributes them to the Retailers. They make sure that their products are available in every consumption point, e.g., Supermarkets. They might have to visit several shops in a day to ask them about their products and how much they need require it. A perfect example to illustrate this is by discussing the Pharmacy store. A single pharmacy store has thousands of medicines in its store. Now, should he go to thousands of companies to get all those medicines for his shop? Well, that’s practically not possible. Therefore, the distributors of every company go to the medical store and supply the required amount of medicine to them.
Not to forget, the distributors are not only there to sell the products to the retailers. In some cases, they also sell it to the wholesalers. For instance, one of the distributors could get the vegetables and then sell them to the local wholesaler. Then, they will distribute it to the concerned retailers. The transportation cost of the distributor is one of the major costs as he has to go different places for the distribution. That’s why the distributor analyses the cost that he will incur on the transport and includes it into his profitability analysis.
Now, you must be familiar with all the differences between the Wholesaler, retailer, and distributor. Not knowing these differences is something common among the people. However, it’s always good to know about it as we interact with them on a daily basis. Especially the Retailers. Just to recall, a retailer works on business-to-customer sales, A wholesaler works on B2B and B2C sales, and a distributor works on only B2B sales.