MGH Distributors

Difference between wholesale and distribution

Wholesale

Wholesale is selling of goods in large quantities at low prices typically by retailers gaining some profit. A wholesaler only fulfils orders from retailers whereas distributors look for different sources in the market. Wholesalers are simply related to retailers and hardly work with small producers.

Distribution

Distributors are a legal entity or a person who sells goods on behalf of a principal. They are in contact with manufacturers. They create value by providing total solutions for the customers. A distributor will promote a brand, a wholesaler would not.

Wholesale vs Distribution

Since distributors look for orders all over the market, they have a broader scope of operation. They have a narrower scope of operation as compared to distributors.

Wholesalers work with the retailers as their main customers while distributors have producers as their primary employers.

Distributors buy the goods from manufacturers and then resell them at a cost they are allowed at.

A wholesaler’s source of revenue is the discount on the products. They gain by purchasing large quantities of goods at a lower price from producers and sell them to retailers in smaller units. Whereas, distributors gain by demanding a percentage of net sales for their services. That fee is the main source of income for distributors.

Wholesalers are often dealing with one specific product or in a specific category of products.

Distributors are basically in a contract with the company for selling its products unlike wholesalers who have no such contract.

Wholesalers have two level and three level channels of the levels of distribution. Distributors are present in three level channels of distribution.

Wholesalers do not have to engage in promotional activities while distributors need to promote the products to increase their sales. Wholesalers do not have to take part in marketing and pitching and look for the interests of the retailer whereas distributors take active part in it and somewhat become the sales representative of the producer.

Distributors serve as an intermediary and help give retailers access to the products they want to sell. They might also be in charge of a specific geographical location like a city, state or country. Some distributors are also responsible for shipping to international countries.

Wholesalers usually do not work with customers directly. They sometimes require a business to register with them. Distributors have various customers including retailers, wholesalers and direct customers.

Types of wholesalers and distributors

Some types of wholesalers sell directly to the customers so they start a membership and add the customers as members. There, you need to be a member to buy a product. Another type of wholesalers sells to businesses. Here, the businesses have to register with the wholesaler.

There are different types of distributors as well. Extensive wholesalers cover a certain region alone for a company while intrusive distributors help brands sell their products through different territories or regions. There are direct distributors who sell products directly to stores and selective distributors give the brand the option to select from where they want to sell. For more information, you can ask your queries to Myanmar Golden Heart.

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