The term wholesale refers to any vendor who sells products to anyone other than the typical end consumer. Wholesalers sell their goods to business or professional users, retail stores, industrial, institutional or commercial clients, or to other wholesalers. Wholesalers may also act as a broker or agent for others wishing to purchase or sell merchandise. This merchandise can include either new or used goods or products. These vendors can either work from their own, independent locations, or can gather with other wholesalers in a specialized “wholesalers marketplace”. Currently, with the influx of trading on the internet, wholesalers have broken into the new market of e-commerce.
Wholesale vendors typically buy and large lots or bulk and sell in smaller pieces or groupings. Most of the time, wholesalers are not required to gather and pay sales tax, but on occasion, and based on location, may be required to pay a specialized wholesaler tax. Wholesalers may offer a small range of products, all made by the same manufacturer, or may offer to their clients thousands of items manufactured by many different producers. These products can include components of other end user items, such as electronic or automobile parts, or they may be the finished product, ready for consumer purchase.
Trade companies dealing in the wholesale market are critical to a healthy economy. Wholesalers provide governments, institutions and businesses a readymade, convenient and wide variety and source of goods, which allow the buyers to minimize housing of stock. Manufacturing companies rely on wholesalers to market and distribute their goods, which frees up their resources to do other mission critical tasks. Wholesalers also take on tasks of customer service, transaction processing and technical support. Some wholesalers even offer services to their customer base, such as financing, advertising, advising as well as repair and installation services.
There are two types of wholesalers. Merchant wholesalers buy products in bulk or lots, and take ownership of the goods prior to resale. Individual sales branches and offices of certain manufacturing companies also fall into this category. Merchant wholesalers deal in durable goods which have a shelf life of more than three years, including automobiles, furniture, sporting goods, parts and toys. They also buy and sell non durable goods, including groceries, drugs, gas, alcohol and books. The wholesale electronic markets, agents and brokers handle sales for others based on a commission or fee basis. They usually will never take official ownership of the goods.