2020-10-10
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(From: httpwww_pjms_zim_pcz_plpdfpjms6distribution20channels20and20their20roles20in20the20enterprise.pdf)
| UNIT 3 |
| WHOLESALE AND RETAIL |
Ex. 3.1. Study the following terms: bulk, commodity, merchandize, profit margin, supply chain. If necessary, check their definitions in the dictionary.
Ex. 3.2. Before reading the text, can you explain the difference between “wholesale” and “retail”? Do you have your own work experience in any of these trade models? Do you know some well-known wholesalers and retailers in Russia and foreign countries?
Ex. 3.3. Read and translate the following text.
DIFFERENCE BETWEEN WHOLESALE AND RETAIL
The word wholesale simply means selling in bulk quantities and retail stands for selling merchandise in small quantities.
Wholesale and retail are two distribution arrangements, that constitutes a major part of the supply chain.
When the goods are manufactured, they are sold in large quantities (wholesale) to the wholesaler, who further sells them to the retailers, who finally sells them to the ultimate customers.
Because of this divide, retail relationships are categorized as business to consumer (B2C) or direct to consumer (DTC), while wholesale is known as business to business (B2B).
Definition of Wholesale
Wholesale refers to the selling of goods to the customers like retailers, industries, and others in bulk, at a low price. It is a type of business in which goods are being purchased from the producers by the wholesaler in big lots, and then the bulk is split into comparatively smaller lots. Finally, they are repacked and resold to the other parties.
Wholesalers do not pay much attention to the location of the shop and its appearance, and display of goods because they sell only a specific type of items, and their customers are generally retailers or other businesses, who purchase the goods for the purpose of resale. These things do not matter to them at all.
In wholesale business, the wholesaler gives more emphasis on the quantity of goods, not on the quality. For starting a wholesale business, there is a huge capital requirement as the business size is large. It does not require any publicity or advertisement.
However, the customers of a wholesale business are spread in various cities, towns or even in different states. Most goods are sold on credit to the customers of the wholesale business. The price of purchased on wholesale is lower as it consists of less profit margin.
Definition of Retail
Retail means selling goods in small lots. When the goods are sold to the final customer, for consumption and not for the purpose of resale, in small quantities, then this business type is known as Retail. Retailers are the middleman between wholesalers and customers. They purchase goods from wholesalers in bulk and sells it to the ultimate consumer in small lots.
The prices of goods purchased in retail are relatively high. The first and foremost reason behind this is the advertisement cost, and the profit margin is high. Moreover, they include other expenses in the price of goods on a proportionate basis, like the rent of premises, salary to the workers, electricity expenses, etc.
Due to extreme competition, it is quite difficult to retain customers for a long time, so the retailer should know the techniques of handling different kinds of customers. In this way, shop location, the appearance of the shop, goods displayed, quality of products and service provided is given much importance because it leaves an impact on the customer’s mind. Moreover, the goodwill of the retailer depends on these parameters. By virtue of this, the retail business person always goes with the quality products. They reject the defective or inferior quality products and pick the best one.
(From: https://keydifferences.com/difference-between-wholesale-and-retail.html)
