Whole sale versus retail

Before we can begin to talk about wholesale versus retail you are going to need to understand what the each term means and what the differences in those two terms are. But something else that you should keep in mind when it comes to wholesale versus retail is that neither one of them is better than the other, but each one of them have their pluses and minuses that you must be aware of.

Let's begin by talking about wholesale. Basically wholesale is the selling of a large quantity of goods to a business that is going to resell those goods. This is basically how retail stores stay in business. Many businesses sell their products in mass quantities to retail stores at wholesale prices. Something that you need to know about wholesale prices is that these prices are a lot lower then what you are going to pay in a retail establishment. The reason that the prices are lower is because you are buying in bulk which helps to lower the cost of the individual items.

Now that you understand the basic concept of wholesale we are ready to move on to retail. Many people who open up a store or small business with the intent to sell products to the public are opening up a retail store. Basically a retail store is going to sell items that they have purchased from other people at a higher price, otherwise known as the retail price, so that they can make a profit.

In case it has not become obvious to you yet, retail can not exist without wholesale and wholesale can not exist without retail. Basically in the business world you are going to need to have both retail and wholesale in order to purchase and sell goods. The reason for this is that the retail stores are going to need goods to sell and they can not purchase them from other retail stores they must purchase them from wholesalers. The reason that retailers can not purchase items from other retail stores is that the prices of the item would actually increase because they would need to charge enough to cover the cost of the item. By purchasing through wholesalers then each retail store can charge about the same price which allows them to remain competitive with each other.

Something else that you need to know about retail prices is that retail stores always mark up their prices so that they can make a profit and this price is actually passed onto the consumer. This is why you can find the same item for different prices based on different stores and different retail store locations. But this doesn't mean that wholesalers don't mark up their costs as well the main difference is that when it comes to wholesale items the mark up isn't as steep as a retail markup but it is still enough of a mark up for the wholesalers to make a profit.

It was mentioned earlier that in order for retail stores to exist you are going to need wholesalers to supply the retail stores, and the same thing holds true for the opposite, without retail stores wholesalers wouldn't exist. But what was not mentioned is that many people who run a small business making items, such as jewelry or bead crafts actually run both types of establishments. They will sell their jewelry to a retailer to sell for them because it is cheaper to sell it that way. But you will also find them selling their own jewelry at boutiques or other places that they have established. If you are considering doing both retail and wholesale than you are going to need to price your product at two different levels, retail and wholesale, from the very beginning.