wholesaling

wholesaling

Selling of merchandise to anyone other than a retail customer. The term may include sales to a retailer, wholesaler, broker, distributor, or business enterprise. Wholesaling usually involves sales in quantity and at a cost significantly lower than the average retail price. It has become an important step in the supply chain since the introduction of mass production and mass marketing techniques in the 19th century. Without wholesalers, manufacturers would have to market their products directly to a huge number of customers at high unit costs, and buyers would have to deal with an inconveniently large number of suppliers. There are three major categories of wholesalers. Merchant wholesalers, the most important category, are independent businesses that buy merchandise in great quantities from manufacturers and resell it to retailers. Manufacturers' sales branches are businesses founded by manufacturers to sell directly to retailers. Merchandise agents and brokers represent various manufacturers; they usually do not buy the merchandise they handle but instead arrange for shelf space and the display of merchandise. So-called warehouse stores sell large quantities of goods at near-wholesale prices. See also retailing.