Wholesale and retail are two distinct types of product sales, with their own characteristics and audiences.
Wholesale supplies products in large quantities, usually for resale, while retailers sell in smaller quantities, but directly to the target audience.
Together, these trading models meet the different demands of the market and move the economy.
Wholesale
Wholesale trade (or wholesale) is the sale of products in large quantities, generally intended for resale by other traders. For this reason, the wholesale market is marked by mass production of the same products and by low price, considering that the profit is obtained through the high quantity sold.
The wholesaler is commonly called a “distributor”, since, as a rule, he transfers the goods to other merchants. Thus, most of the time, the wholesaler is the factory that creates the product. It is worth clarifying, however, that nothing prevents the wholesaler from selling directly to the final consumer.
Retail business
Retail trade (or retail) is the type of sale that directly serves the end consumer, and the most common form of sale used in the daily routine of stores and markets. In retail, products are sold in units or in small quantities, according to the consumer's exact need. For this reason, the price will always be higher than wholesale.
It is important to emphasize that the sale made by the wholesaler directly to the final consumer does not qualify retail.
Differences between wholesale and retail
With the market increasingly dynamic, merchants adjust their business according to the demands and end up smoothing the differences between wholesale and retail. However, in general terms it is possible to state that:
| . | Wholesale | Retail |
|---|---|---|
| Target Market | Smaller wholesales or retails (resale) | Final costumer |
| Purchase Volume | High volume | Low volume |
| Operation mode | Fleet of vehicles and depots generally located outside the urban perimeter | Stores located in the urban perimeter |
| Occupation area | National, state or municipal | Local* |
| Cost of Goods | Reduced unit price due to high sales volume | Higher unit price due to low sales volume |
*Although retail trade has, as a rule, a local area of operation, internet sales are perfect examples of retail nationwide.
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There is also the intermediary modality of sale popularly called cash and carry. As its name suggests, the wholesaler combines wholesale and retail characteristics to meet specific demands of quantity and price.
Thus, the cash-and-carry market sells products in average quantities and adjusted prices, usually for small traders or for the final consumer.
