Business Sectors - Wholesale (Wholesalers)


The U.S. Bureau of the Census defines Wholesaling as follows: "Wholesaling is concerned with the activities of those persons or establishments which sell to retailers and other merchants, and/or to industrial, institutional, and commercial users, but who do not sell in large amounts to final consumers."

Wholesale businesses play a critical role in the supply chain and distribution systems. There are different types of wholesale businesses that may be classified as Merchant wholesalers, General merchandise wholesalers, single-line wholesalers, Specialty wholesalers, Cash-and-carry wholesalers, Drop-shippers, Truck wholesalers, Mail-order wholesaler and so on.


Merchant wholesalers own or manufacture the products they sell. General merchandise wholesalers carry a large variety of items that are generally non-perishable items like electrical supplies, plumbing supplies, automobile equipment and so on. Single-line wholesalers carry a narrow line of merchandise as compared to general merchandise wholesalers. Specialty wholesalers carry and even narrower line of products, but offer information and specialized services along with the product. Specialty wholesalers are generally domain experts in the products they carry.

Cash–and-Carry wholesalers are like any other type of wholesaler, but the customer must pay cash when they pick up the goods. Drop-shippers are wholesalers who do not handle, deliver or stock the product they sell. Drop-shippers are mainly involved in selling. They get orders from retailers and businesses and pass the order to the producer or the manufacturer. The producer of manufacturer then directly ships the order to the customer. As one would expect, drop-shippers have significantly lower operating costs.

Mail-order wholesalers sell directly to retailers through the internet or by using catalogs. These wholesalers typically sell industrial products to industrial customers. Truck wholesalers specialize in handling and delivering products that can be stocked in trucks. Truck wholesalers typically handle high –value perishable goods like grocery and tobacco. Truck wholesalers can differentiate from other wholesalers by carrying perishable products that others don’t carry.


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