Retail vs wholesale: the differences between the two models

In both cases, it is about selling, but if we weigh the retail vs wholesale then you will find important differences that you should understand to decide what path to take.

The evolution that has been taking the business over the years has been accelerated by the implementation of the technology in its operations, this has altered the behavior historically established in which each participant had a well-defined role.

In general, those who are part of the commercial activity are; manufacturers, distributors, physical stores and online stores. In either case you're probably familiar with the models of a retail business  and wholesalers.

Although both models have features both positive and negativethese are differentiated on the basis of their ability to direct interaction with the consumer.

In this post, we will climb the ring to retail vs wholesaleso that you will be able to determine for yourself the best model to follow for your business.

Basics

Before moving on to establish differences, it is necessary to understand the meaning that most elemental of each of these terms.

In simple terms, retailer or retail means that you are from the store, or in his absence, the manufacturer sells its product directly to the consumer. While when we talk about wholesale, is the one that sells its products in large quantities to an “intermediary”, who is who in turn sell to the end consumer.

Main features of the retail trade

3. In retail sales the products are sold at a higher price per unit than wholesale. Since wholesalers sell products in large amounts, buying the product with a discount and then use their own formulas to increase the sale price to the public.
4. As a retailer, you have control over your product, to determine when, where, and how much is sold.
5. Through the retail trade you have the possibility to interact directly with your customers, one-to-one and receive real-time comments.
6. On the basis of the behavior of the client in the store  and in their interaction omnicanal, it is possible to get to know him better and implement strategies in function, to improve your experience.

Main features of the wholesale trade

1. A wholesaler, you have the ability to sell large quantities of their product to the time and sell them to consumers indirectly in many stores simultaneously.
2. Wholesaling involves less cost, at least in comparison with the amount of money spent during the whole year in the field of marketing in the grocery store, and other general expenses involving the operation in the trade and retail.
3. A large part of the working time should be devoted to managing the logistics of transport and distribution of goods; take the product to stores specific, manage the manufacturing process  and maintaining the inventory.
5. As a wholesaler you will need to provide large quantities of your products at the same time. For many manufacturers to comply with large orders within a tight deadline can be difficult.
6. The wholesaler does not interact directly with the customer, (in most cases) in their place relates to business executives who acquire their products in large volumes.

Is there a third option?

While historically has been based on the retail vs wholesale, new technologies and globalization have given rise to a new phenomenon that is growing in leaps and bounds.

Today it is possible to sell your products in a retail environment, at the same time as selling it wholesale. What that allows you to interact directly with the customers and at the same time to see that your products are sold at other retailers.

It is very easy for a dealer to sell its product for less, especially because the wholesaler will not have all the expenses that involve the retail sale. The hybrid model, it is shown as a very attractive option for those who are able to cover all the links of the chain.

Conclusion

If we compare the retail vs wholesale we find important differences, especially in terms of dealing directly with the end consumer.

Today, however, technology has made possible the emergence of a third model in which the wholesalers take on the role of retailers, selling a part of its production to the final consumer, but without ceasing to be a supplier to many other retailers.

To choose the best model for your business will depend on each case, it is necessary to analyze and assess the goals of each company, because, while it can be very lucrative to cover the entire chain, it also involves a lot of work, and the neglect of areas where it is likely that you are involved with greater strength.