Difference between Wholesaler and Retailer

Wholesale and retail are two major components of the distribution process in the supply chain industry. When a company manufactures a product, it is first sold in bulk to a wholesaler, who then sells it to a retailer, who then sells it to the final customers. Simply put, a wholesaler purchases a product in bulk from the manufacturer and sells it to a retailer, who then sells it to end users.

Who is a Wholesaler?

Wholesalers buy goods directly from the manufacturers in bulk and sell them to retailers in small quantities. They serve as a link between manufacturers and retailers. He purchases products in bulk, unpacks them, repacks them, and sells them to retailers. The wholesaler sells only specific items and is unconcerned about the shop’s location, packaging, or display of the goods. They are more concerned with the quantity of a product than with its quality. Large capital is required to maintain a large stock and provide credit facilities to retailers. Functions like grading of products, packing into smaller lots, storage and transportation, promotion of goods, collection of market information, etc., are performed by the wholesaler. 

Who is a Retailer?

Retailers buy goods and services in small quantities from the wholesalers and sell them to customers, who will use them directly rather than resell them. In order to connect wholesalers and customers, retailers act as a middleman. Due to the retailer’s business of purchasing goods at lower costs and charging customers a higher price, the profit margin in the retail industry is high. Rent, electricity, employee wages, and other costs are all factored into the final price that retailers charge for the product. The area of operation of retailers is generally limited to a locality. 

Difference between Wholesaler and Retailer 

Basis	Wholesaler	Retailer
Meaning	Individuals who purchase goods in large quantities from manufacturers with the purpose of reselling them for a profit are known as Wholesalers.	Individuals who purchase from wholesalers and sell goods in smaller quantities to end users are known as Retailers.
Capital	A large capital is needed.	Less capital is needed as compared to Wholesalers.
Link	It is a link between manufacturers and retailers.	It is a link between wholesalers and customers.
Location	They are located in the central market of the city.	They are located in various markets of the city.
Margin of Profit	In wholesale, the margin of profit is less	In retail, the margin of profit is high.
Nature of Payment	Generally, most of the dealings are done on credit.	Most of the dealings are done with cash.
Speciality	They sell or deal in one or two specialised products.	They deal in a variety of products.
Storage	They require large storage areas to stock goods on large scale.	They do not require large storage areas as they purchase goods on small scale.
Window Display/Advertisement	Wholesalers do not require any advertisement or window display as they are not required to attract their clients.	Retailers do have a requirement for advertisements and window displays to attract more and more customers.
After-sale service	There is no arrangement for after-sale or repair service.	There is arrangement of after-sale service.
Scope of business	Business is spread over several places.	Retailers cover local areas.