Retail Buying Versus Wholesale Buying

Retail and wholesale buyers are involved in the process of buying commodities or items. A significant difference between the two parties relates to the end point where the goods are traded.

Retail Buying

Retail buying relates to obtaining stock for local stores. This is sold direct to the end consumer. Retailers are likely to get involved with negotiating prices with suppliers, tracking inventory and market research. It is crucial to continue to conduct the market research to make sure the latest fashions or trends are available to buy. Because the retailers are the smallest entity on the supply chain, they are certain to buy supplies in smaller quantities compared to the wholesaler.

Since the prices can vary with the many wholesalers, it is crucial for the retailer to shop around to attract the most competitive prices. By getting the best price in the marketplace, a retailer is in a better place to make the desired profit on the prices marked up in store.

Wholesale Buying

Wholesalers purchase stock in greater volume. This stock is made available to the businesses or retail establishments. Since the wholesaler is able to get supplies in such high volume, they are able to offer the merchandise to retailers with a decent profit margin. Wholesalers obtain the supplies direct from the major manufacturers or distributors. A wholesale company purchases in bulk and offers the goods in smaller volumes to many retailers.

Pricing Options

Even though retail and wholesale buying can share certain similarities, the amount paid for the merchandise is certain to vary. A retailer is quoted a higher price to source the supplies to market direct to the end consumer because the wholesaler is able to buy in higher quantities. By purchasing in bulk, the wholesaler is often able get competitive pricing or discounts from the manufacturer or distributor.

Quantity of Stock

The buying aim of the wholesaler is to buy inventory at such high volume that they are able to get low or discounted prices. This still lets them make a profit after trading with the businesses or retail establishments. Retail buying power is smaller. A retail store selling direct to the end consumer is able to buy in smaller volume to match the size and reach of the particular business. Retailers are still able to get the attractive prices, which enables them to make a profit when making the merchandise available to the consumer.