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Fact Checked

What Is Wholesale Marketing?

Helen Akers
Helen Akers

Wholesale marketing occurs when a producer of a good sells it to an individual or company that intends to resell it. The good is usually resold under a different brand name. Wholesale networks help to connect potential buyers and sellers with each other. This is common in industries that deal with commodity goods such as agriculture and fuel.

Manufacturers that produce and market a line of commodity goods, such as gasoline and diesel fuel, may sell excess supply to third-party dealers. This is what is referred to as wholesale marketing. In this case not only is the producer selling the good under its own brand name, but it is allowing other firms to purchase its goods and resell them under their own. Sometimes this occurs in the retail food industry when name brand manufacturers also produce store brand products.

Farmers' markets are an example of wholesale marketing.
Farmers' markets are an example of wholesale marketing.

Many local farmers and mid-sized agricultural producers participate in wholesale marketing. They produce crops and sell them to a number of buyers that may represent local or large grocery chains. These companies then resell those crops to their own customers. The local agricultural producer also retains the right to sell some of its own produced goods locally, perhaps at a farmer's market or directly from its farming locations.

Wholesale marketing companies may offer services from production through distribution.
Wholesale marketing companies may offer services from production through distribution.

Farmers' markets are a type of wholesale marketing. Consumers are able to go to a central location where they can purchase goods directly from the producer or manufacturer. This can often save money as the added distribution costs and retail markups are avoided. In addition to farmers' markets, there are a variety of trade magazines that allow businesses to purchase goods directly from the manufacturer.

Many farmers participate in wholesale marketing.
Many farmers participate in wholesale marketing.

There are some companies that specialize in wholesale marketing. They act as a middleman between the manufacturer and the retailer. These companies may offer a complete set of services to the manufacturer, including packaging, storage and distribution. A wholesaler will usually charge additional fees for these activities, which is often reflected in the product's final selling price.

Retailers are typically dependent on wholesale marketing.
Retailers are typically dependent on wholesale marketing.

Unless they manufacture their own goods, retailers are dependent on wholesale marketing. Some goods may be delivered directly from the manufacturer; however, the majority is obtained from wholesale companies. In the case of a large retail chain, its corporate buyers often determine the mix of goods that will be offered in its store locations. These decisions are usually made by region. Small, privately owned businesses may belong to a national affiliated network to receive discounts and access to products they might not have the buying power to secure on their own.

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Discussion Comments

candyquilt

I actually purchased many things from wholesale marketers for my wedding. I bought wedding favors, table decorations and many other things this way. Since I had to buy many, it saved me money.

My father-in-law does a lot of wholesale purchasing as well. He has a small grocery store and buys all the produce wholesale from farmers. The customers are happy because they get very fresh foods. Of course he adds his profit onto the prices, but it's not extreme. It's still very affordable for his customers. His store is doing very well.

literally45

@SarahGen-- You're missing an important point. When businesses purchase from wholesalers, they purchase in bulk and make large payments. When the consumer buys, he will buy one or two. This is not profitable for manufacturers.

It makes much more sense to sell through wholesale marketing where both the manufacturer and the seller will make a profit.

SarahGen

As a consumer, I find wholesale marketing annoying. I see small businesses purchasing goods at very low cost from wholesalers and then reselling it with very high profits.

I know this is how they run their business, but why can't the consumer have access to these goods directly? It would save us so much money.

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    • Farmers' markets are an example of wholesale marketing.
      By: adisa
      Farmers' markets are an example of wholesale marketing.
    • Wholesale marketing companies may offer services from production through distribution.
      By: Gale Distler
      Wholesale marketing companies may offer services from production through distribution.
    • Many farmers participate in wholesale marketing.
      By: Johan Larson
      Many farmers participate in wholesale marketing.
    • Retailers are typically dependent on wholesale marketing.
      By: pressmaster
      Retailers are typically dependent on wholesale marketing.
    • Farmers may choose to sell some of their products directly at nearby farmer's markets.
      By: Boggy
      Farmers may choose to sell some of their products directly at nearby farmer's markets.
    • Buying produce from a wholesale market often lets customers interact directly with the grower.
      By: Glamy
      Buying produce from a wholesale market often lets customers interact directly with the grower.