What Is Wholesale?

Wholesale prices are lower than retail.

Wholesale usually means the sale of merchandise in bulk to a retailer, who then sells the items on to individual customers. It can also refer to the sale of goods to commercial, industrial or professional users, or to other wholesalers.

Wholesale Businesses

Many goods are sold wholesale. These include manufactured items such as cars, garments, jewelry and electronics, as well as foodstuffs such as fruit, vegetables and grains.

Wholesale Operations

Wholesalers are often "middlemen" who buy goods in bulk direct from manufacturers, producers and farmers, and then repackage them for sale in smaller lots.

Wholesale Prices

Wholesaler prices are significantly lower than retail prices. Wholesalers make a small percentage profit on items sold, and make their money by selling large quantities.

Location

For non-perishable goods, wholesalers work from independent premises typically outside major cities. However, wholesale of perishable goods often takes place at special markets closer to retail consumption centers, such as the New York City Produce Terminal Market.

Recent Changes

New technologies have reduced opportunities for wholesalers by shortening the distribution chain. In some industries, the Internet has allowed manufacturers to cut out the middleman and sell goods directly to consumers.

References

• Investor Glossary: Wholesale
• New York City Produce Terminal Market: About Us