Manufacturers vs wholesalers vs retailers

When you’re trying to find a supplier you will come across a number of manufacturers, wholesalers and even retailers. The trick is to know the difference between the three of them and what the best option is for you.

 

Manufacturer.
A manufacturer is a company that physically creates and manufactures their own products and makes these available for sale. Many manufacturers do not sell directly to the public and rely on wholesalers to resell their products. The main reason they do this is because they do not have the sales staff and resources to handle individual small end-user sales.

Buying direct from the manufacturer will be a lot cheaper as you are dealing directly with the source. There will however be additional order requirements such as minimum quantities, which will mean you need to physically pay for and store a large number of units. A manufacturer also normally only stocks and sells their own products which means you may need to deal with a number of different companies to offer a wide range of items for sale.

 

Wholesaler.
Wholesalers generally buy products in bulk from manufacturers and then resell them in smaller lots. As they are effectively acting as a middleman they are more expensive than dealing directly with the manufacturer however will have smaller minimum order quantities and may even sell single units. Wholesalers normally also stock a wide range of different products from a wide range of manufacturers.

Retailers.
A retailer is any company that sells direct to the public and the end user at a higher markup. If you operate a dropship website, you will be a retailer.

 

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