Difference Between Wholesale and Retail

It requires overall less cost as several expenses are terminated, such as transportation of goods, as goods are purchase once in bulk only. But for investing, the capital requirement is high in terms of monetary value.

It is operated in small size where low capital is required as an investment. There are many types of retailers in the market dealing with particular types of goods.

Comparison Table Between Wholesale and Retail

Parameters of ComparisonWholesaleRetail
CostLess costlyHigh cost
Business sizeLarge  Small
CapitalHigherLess
Business OutreachLarge spaceLimited space
Art of sellingNot requiredRequired

What is Wholesale?

The person dealing in wholesale is called a wholesaler, and the following are features of a wholesaler:

  • They deal in goods directly from producers and manufacturers.
  • They deal/buy-in goods in large quantities and sell in small quantities.
  • They can deal with different and particular types of goods.

Following are the functions of a wholesaler:

  • Collection of goods: they buy goods in bulk from producers and manufacturers.
  • Distribution: they sell and distribute goods to the retailers in small quantities. 
  • Financial Support: they provide credit to the retailers and also help financially to the manufacturers and producers. 

What is Retail?

Retail is the type of business where a seller sells and purchases goods in a limited area to limited buyers. The person doing this is called a retailer. There are three types of retailers:

  1. Department Store: they offer a good range of consumer goods. There are separated areas based on particular products. They are a large store that can provide mostly all important products for livelihood.
  2. Super Markets: they offer types of foods and beverage goods mainly. They sell goods including fashion, electrical products, etc.
  3. Convenience Retailer: they can be easily found in residential areas providing goods and premium prices due to extra convenience value.

Features of Retail:

  • Small Quantities: retailers do business in small quantities with limited stock. It operates in few areas or a particular area.
  • Limited customers: there are few customers associated with retailers that are less in numbers.
  • Varieties: despite doing business on a small scale, it can offer a good variety of goods/products.

Main Differences Between Wholesale and Retail

  1. Art of selling is required in business to exceed the outreach of the business, in wholesale; this is not required as it already deals in large space and maximum business outreach while retail requires the art of selling to exceed its business outreach which is limited.
  2. The wholesale business is not required to promote the business or need comparatively less to promote the business, whereas retail businesses need to promote their business so that they can reach a maximum number of people.
Difference Between Wholesale and Retail

Conclusion

They are opposite from each other in many aspects, such as business size, cost, and capital required, etc. but the similarity is that both of them sell their goods to their respective customers and both of them aim at similar objectives such as they aim at increasing profits, expand their respective business, and other small and long term objectives.

Other than wholesaler and retailer, there is manufacturer, consumer, distributor, supplier, etc. all of them have their respective role in business and market, a consumer being the end-user, and wholesale being the supplier first identity.

References

  1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=270784
  2. https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0289.00213
  3. https://www.emerald.com/insight/content/doi/10.1108/13598541211269247/full/html
  4. https://www.sciencedirect.com/science/article/pii/S0377221717310809
  5. https://www.aeaweb.org/articles?id=10.1257/aer.103.3.575
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