The different kinds of Wholesale Businesses
Wholesale businesses are all around us. From fueling the dropship revolution to supplying critical pandemic supplies worldwide; wholesalers are an important part of our economic infrastructure.
Research Germany explains, “the German wholesale and retail trade represents an annual turnover of 2.19 trillion Euros and 6.4 million employees. There are about 150,000 wholesalers and about 300,000 retailers.”
So, this sector is absolutely vital to our national GDP. But with so many different kinds of wholesale businesses out there, it’s helpful to have all their descriptions in one place. We’ve provided that below as a quick, go-to glossary.
The types of wholesalers
Specialist wholesalers will focus on one product group or category. Think of produce wholesale businesses that just sell fruit and veg as a clear example of this kind of business. Or the electronics wholesalers who provide industrial consumers with electrical supplies.
A service wholesale business is one of the first forms of wholesalers. It’s characterised by an environment where customers are helped by salespeople who know the organisation’s products inside and out. This could include supporting their client with technical or commercial services too.
This is a hands-free experience where sales associates do not advise the customer on their purchase. Customers browse the catalogue or display range and make their own selections. A category that includes cash-and-carry stores, the goods are loaded by the customer and paid for on-site. They are then transported by the customer themselves, as opposed to being delivered by the wholesaler.
As part of the self-service wholesale category, delivery wholesalers usually offer an online, fax or phone catalogue for direct-to-site delivery to the end customer. That delivery is handled by the wholesale business and they might use predictive customer analytics to plan their fleet requirements. They could have a huge range of products or specialised in one area like furniture & home goods.
This is a wholesale business that acquires large job lots or pallets of raw products and materials. These are often agricultural and forestry products, such as milk, wood or ores. However, they can also be old materials, such as wastepaper or other waste products. They then sell these bulk goods to be used as raw materials in other manufacturing processes or for other purposes.
A master category which includes, cash&carry, shelf and delivery wholesale -among others- sales wholesale is another way to describe any wholesale business. It is characterised by the fact that it buys goods directly from the manufacturer and then mostly resells them to the retail trade. The products can vary greatly here as well. From food to clothing to furniture, everything is there. These operations may use predictive sales analytics to make data-based decisions about product demand or buying habits.
Offering a huge variety of often random goods, assortment wholesale businesses are not niche or specialised. They stock whatever they believe they can shift and carry products in extreme quantities and varieties. For this category, think of food wholesalers with aisles and aisles of unique food goods available in bulk.
Cash & Carry
Pay & collect or cash & carry operations are a form of self-service wholesale where buyers select from a product range, pay at the warehouse and take it away on the day. The only difference between cash & carry and delivery wholesale is that the items are transported by the customer themselves. Items could be as varied as televisions to shredded cheese.
We are dealing with a warehouse wholesale if the largest part of the wholesale turnover is achieved with the sale of goods from the warehouse (i.e. without local business). The goods are purchased by the wholesale company, stored and sold from the warehouse to the customers. This bridges the time between production and use. In this type of wholesale business, buyers make their purchases without seeing them in advance. For warehouse wholesalers, predictive analytics for inventory can also play a big role.
Also known as a ‘rack jobber,’ the shelf wholesaler pays a share or fixed rent to access a rented shelf space from an existing wholesaler. The wholesaler who rents out shelf space is paid either through a share of the turnover or through a pre-determined rent.
A route wholesaler does not actually sell any products himself, but performs intermediary work. He mediates between the manufacturer or importer and the retailer. Logistics play a significant role in this type of wholesaling.
This is a location akin to a farmer’s market, where a large number of wholesalers provide goods for sale. They have a fixed location and could include any number of food, produce or consumer goods.
In conclusion, there are a wide range of wholesale businesses that provide goods, act as transporters or intermediaries, trade in raw materials, sell spaces and offer other critical functions.
Nearly all of them will use predictive sales analytics to forecast demand, reduce churn, create the perfect product mix and set prices. They might do this via manual methods or use a piece of software like Qymatix.
If you currently run a wholesale enterprise; why not have a look at what we can do to drive margins and cut costs?
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