Many wholesalers often have a question, whether they should sell directly to consumers or not. In response to this type of problem, I went to conduct a survey on this aspect, and I will answer this question in several aspects below.
1.Is there a minimum order quantity for products purchased from wholesalers?
There are no legal limitations on wholesalers selling to the public. Wholesalers, though, make their money by selling in bulk.
They also allocate their resources differently. Wholesalers don’t spend as much time on customer service.
So if they had to service the general public they wouldn’t have anyone to do it. They typically have a large warehouse, where it is difficult for the public to visit on a regular basis safely.
Therefore, they only deal with bulk orders. As a result, you must apply to buy wholesale from them.
Wholesalers operate on a different part of the supply chain. They buy from manufacturers. Retailers buy directly from wholesalers, but they generally have an established business and are simply adding a new product to their product line.
This means that their entire business is not dependent on the wholesaler. This is why wholesalers get retailers to apply to work with them, because they would like to service clients who will be with them for a long time.
During the application process they can also work with the retailer to source even better products for them.In other words, depending on the requirements of the suppliers, the minimum order quantity of some suppliers is also very small. For example, the Alibaba supply market is almost directly to consumers.
2.Why do wholesalers not sell to the public?
Wholesalers make money due to an economic theory called economies of scale. It means that the more products they sell the more money they make.
This is due to the size of their margins. The margin is how much they make by selling each product. Wholesalers only make a small percentage markup per item, but sell a lot of items. Retailers on the other hand sell at a higher markup, but sell less items.
Therefore, wholesalers won’t make enough money if they sell to the public. This is because they would have to spend more money on customer service and sales to sell to them.But, for each individual customer the total money spent is very low.
Wholesalers prefer to have large customers who order more than $1000 to $2000 a time, and usually regularly like weekly or monthly.
A person who just wants one bottle of tomato sauce would not go to the wholesalers factory where they keep all the food. They would go to a supermarket which is a retailer. The pizza store would get tomato sauce at a discounted rate from their wholesaler than what you can get in a supermarket.
This is often how it can be confusing when you see how much restaurants such as Subway charge. If you were to purchase the items for a subway sandwich individually they would cost roughly the same as what subway charges.
This is because Subway gets a bulk discount for the food that they buy because they buy so much of it. When someone buys in bulk they are fulfilling what the wholesalers want which is bulk orders.
3.Should the wholesaler have a business focus？
Generally speaking, suppliers should have a focus. Some small orders can be discarded appropriately. The focus should be placed on these large orders for bulk wholesale, so that orders with a large amount or number of orders will make your business. It’s easier to do, and, on this basis, if you give customers a good customer experience and can achieve long-term cooperation with customers, it’s the best. This is how I mentioned in the previous article. Customer loyalty. Those who are interested can take a look. Secondly, when selecting products from suppliers, pay attention to selecting products with better quality. You should not blindly pursue low prices and ignore quality. This is where you need to pay attention when working with customers.
Wholesalers do not sell directly to the public. This is because wholesalers make money by selling a large volume of orders. Everyday shoppers do not buy in large enough quantities for wholesalers to make money by selling to the public.
There are other places where you can get wholesale like prices such as online marketplaces. These are profitable because of the large amount of users who use their website. This makes it cost effective for vendors to list their items at wholesale prices.