wholesaling

/hohl"say'ling/, n.

the business of selling to retailers, esp. in large quantities (distinguished from retailing).

[1790-1800; WHOLESALE + -ING¹]

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Selling of merchandise to anyone other than a retail customer.

The term may include sales to a retailer, wholesaler, broker, distributor, or business enterprise. Wholesaling usually involves sales in quantity and at a cost significantly lower than the average retail price. It has become an important step in the supply chain since the introduction of mass production and mass marketing techniques in the 19th century. Without wholesalers, manufacturers would have to market their products directly to a huge number of customers at high unit costs, and buyers would have to deal with an inconveniently large number of suppliers. There are three major categories of wholesalers. Merchant wholesalers, the most important category, are independent businesses that buy merchandise in great quantities from manufacturers and resell it to retailers. Manufacturers' sales branches are businesses founded by manufacturers to sell directly to retailers. Merchandise agents and brokers represent various manufacturers; they usually do not buy the merchandise they handle but instead arrange for shelf space and the display of merchandise. So-called warehouse stores sell large quantities of goods at near-wholesale prices. See also retailing.

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      the selling of merchandise to anyone other than a retail customer. The merchandise may be sold to a retailer, a wholesaler, or to an enterprise that will use it for business, rather than individual, purposes. Wholesaling usually, but not necessarily, involves sales in quantity and at a cost that is significantly lower than the average retail price.

      Wholesaling became particularly advantageous after the introduction of mass production and mass marketing techniques in the 19th century. Without wholesale organizations, large manufacturers would have to market their products directly to a great many retailers and/or consumers at high unit costs, and retailers or consumers would have to deal with a large number of manufacturers at great inconvenience.

      There are three main categories of wholesalers: (1) merchant wholesalers, (2) manufacturers' sales branches, and (3) merchandise agents and brokers. The most important are the merchant wholesalers. These independent businesses buy merchandise in large quantities from manufacturers, process and store that merchandise, and redistribute it to retailers and others. Manufacturers' sales branches are businesses established by manufacturers to sell directly to retailers. They tend to be established by large companies which modify their products frequently and to whom rapid, accurate information on sales and suggestions for improvement are especially valuable. Merchandise agents and brokers sell complementary products of several manufacturers. Unlike merchant wholesalers and manufacturers' sales branches they ordinarily do not take title to the merchandise they handle. Rather, they simply arrange for shelf space and the display of merchandise of the manufacturers they represent. See also marketing.

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