Hello!
Please explain me this because I can not figure out!
As I see producers sell their stuff to wholesales. Wholesales gather a bunch of different things and then sell it to retailers who communicate with the costumers and sell it to them.
For example a wholesale of stationery gathers pencils, papers, toners etc. Then they sell these in smaller amounts to retailers who after that deliver directly to the offices (to the costumers).
Why don’t wholesale just sell and deliver right away to the costumers and gain the extra money the retailers basically live on?
In: Economics
The cost of marketing, staffing and storefront(s) is avoided by wholesaling. The wholesaler in most cases sells the product to the reseller at a substantially lower cost so the reseller can maintain sales staff, locations etc.
Another big advantage is that when you wholesale you need far less customers (resellers) to be successful and you have less risk collecting the monies owed to you because if the reseller doesn’t pay, they get no further product and in many cases resellers have a monthly obligation from you or ‘quota’.
Hope this helps.
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