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
Because it’s a business strategy, more or less
Their strategy is to make less profit on much more sales
They do that by selling to businesses who can buy a lot more of their products
If they were to sell to the end customer, businesses wouldn’t feel so great (for lack of a better word) that they must buy from the manufacturer only to sell while competing with the manufacturer. So they don’t.
Not only this, but the manufacturers don’t have the infrastructure to sell such small quantities. A toilet paper manufacturer wouldn’t open a toilet paper-only store because that would be bound to fail (in most cases), as most people wouldn’t go to one store which only sells one commodity item to buy only that one item, which they can buy elsewhere where they’re used to
I’m a bit drunk so forgive me if I don’t make sense
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