Retail vs. Wholesale: What's the Difference?

Retail and wholesale are two different types of shopping. Retail involves selling products directly to the final consumer, while wholesale involves selling products in bulk to other companies, such as retail stores. A wholesaler is a person or company that sells products in bulk to various outlets or retailers for later sale, either directly or through an intermediary. The key difference between retail and wholesale is who buys the products being sold.

In a retail environment, the end user or consumer purchases the product directly at the retail store. On the other hand, a wholesaler sells products to other stores in the retail industry rather than to the consumer. Wholesalers can offer their products at a lower price since they sell in bulk, reducing the handling time and costs involved. Because there are many more retailers than wholesalers, wholesalers don't usually face the competitive problems that retailers face when they find companies that sell their products.

You control the retail price, where your product is viewed, how it's presented, and what other products are shown along with it. Basically, there are two main ways to sell your product: either as a wholesaler or as a retailer. Wholesalers don't interact with the end user on a regular basis because products sold by wholesalers are shipped directly to the retailer. In general, retailers usually sell a product at a higher price than the price they bought it for from the wholesaler.

As a direct shipper, you get the benefits of retail sales (such as a specific brand and a direct line to the customer), while a specialty retailer takes care of the initial part. Wholesalers typically offer their products at a lower price when they buy them in bulk, allowing retailers to make a profit by selling these products in their retail store. The retail company's physical presence, customer service, and marketing efforts influence the customer experience. When developing your retail strategy, you can decide for yourself at what price you are going to sell the products and with what profit margin. While there are often hundreds or even thousands of similar retailers in an industry, there may be only a small number of wholesalers in that same industry.