There are 2 main types of wholesalers: Merchant wholesalers and wholesale electronic markets, brokers, and agents. Merchant wholesalers usually take title to the products that they sell; in other words, they purchase and sell and products on their own account. The merchant wholesale segment also includes the individual sales branches and sales offices of mining and manufacturing enterprises that are specifically set up to perform the marketing and sales of their goods.
Merchant wholesalers deal in either non-durable or durable products. Durable products are new or used products that usually have a normal life expectancy of three years or more. Establishments in this part of wholesale business are engaged in wholesaling products, such as construction materials, furniture, motor vehicles, machinery and equipment, sporting goods, metals and minerals, recyclable materials, toys and hobby goods, and parts. Non-durable products are items that usually have a normal life expectancy of less than three years. Establishments in this part of wholesale business are engaged in wholesaling products, such as paper and paper products, drugs, chemicals and chemicals products, apparel, textiles and textiles products, groceries, footwear, petroleum and petroleum products, farm products, books, alcoholic beverages, newspapers, magazines, tobacco products, and flowers and nursery stock.
Firms in the wholesale electronic markets, and brokers, and agents segment arrange for the sale of products owned by others, usually on a fee or commission basis. They act on behalf of the sellers and buyers of products, but usually don’t take ownership of the products. This sector includes brokers and agents as well as business-to-business electronic markets that use electronic means, such as the Electronic Data Interchange, or Internet to facilitate wholesale business.
Only firms that vend their wares to governments, institutions, and businesses are considered part of wholesale business. As a marketing ploy, many vendors that sell mostly to the general public present themselves as wholesale suppliers. For instance, “wholesale” factory outlets, price clubs, and other organizations are retail establishments, even though they vend their products to the public at “wholesale” rates.
Recent Developments
Recent consolidation of smaller wholesale dispensers has led to more businesses serving their consumers regionally, nationally and internationally. This has resulted in businesses offering more lines of related goods from a bigger variety of makers.
In addition, Radio Frequency Identification technology is becoming used more often by bigger wholesale dispensers with warehouses. RFID tags coupled with a receiver and satellite system allow wholesale providers to keep track of the products they have in stock. Even though this technology is highly promising, many smaller businesses don’t use it because it has not yet become cost-effective in those conditions.
In order to make money in business online, one of the core factors determining this would be the strength of your supply chain.