7 Merchant Wholesaler Examples You Should Know
If you are looking for a way to buy products in bulk at a lower price and sell them to retailers or customers for a profit, you might want to consider becoming a merchant wholesaler. A merchant wholesaler is an intermediary who buys goods from manufacturers and sells them to third parties, such as retailers, businesses, government institutions, or other wholesalers. Merchant wholesalers are essential participants of indirect sales, as they help manufacturers reach a wider market and provide convenience and variety to buyers.
In this article, we will explain what a merchant wholesaler is, what types of merchant wholesalers exist, and give you some examples of successful merchant wholesaler companies in different industries.
What is a Merchant Wholesaler?
A merchant wholesaler is a type of intermediary that takes ownership of the products they sell. This means that they buy goods from manufacturers, store them in their warehouses, and deliver them to their customers. They also take care of the financial transactions, marketing, and market research involved in reselling. Moreover, they bear all the risks of indirect sales, such as damage, theft, or spoilage of the goods.
Merchant wholesalers can be classified into two main categories: full-service wholesalers and limited-service wholesalers. Full-service wholesalers offer a wide range of services to their customers, such as breaking bulk, grading, packaging, labeling, transportation, financing, promotion, and after-sales service. Limited-service wholesalers only provide some of these services or specialize in certain products or markets.
Types and Examples of Merchant Wholesalers
Depending on the type of service they provide and the type of products they sell, merchant wholesalers can be further divided into several subcategories. Here are some examples of each type:
– Cash-and-carry wholesalers: These wholesalers sell goods to their customers at their selling points, where they can pay cash and carry the products away. They do not offer delivery or credit services. They usually deal with low-priced and fast-moving products, such as groceries, office supplies, or hardware. An example of a cash-and-carry wholesaler is Costco, a warehouse club that sells a variety of products in bulk to its members.
– Truck wholesalers: These wholesalers deliver a small number of products to their customers using trucks or vans. They do not offer storage or credit services. They usually deal with perishable or seasonal products, such as fruits, vegetables, flowers, or dairy products. An example of a truck wholesaler is Sysco, a company that distributes food products to restaurants, hotels, schools, and other institutions.
– Rack jobbers: These wholesalers buy and stock goods for their customers, usually small retailers. They fill the shelves in the stores with their products and keep inventory records. They also retain the title to the goods until they are sold. They usually deal with specialty products, such as books, magazines, music, cosmetics, or toys. An example of a rack jobber is Readerlink Distribution Services, a company that supplies books to mass merchandisers, drugstores, supermarkets, and other retailers.
– Drop shippers: These wholesalers do not handle or deliver the goods they sell. They only take orders from their customers and pass them on to the manufacturers or other wholesalers who ship the goods directly to the buyers. They usually deal with bulky or heavy products that are expensive to transport or store, such as coal, lumber, or machinery. An example of a drop shipper is Doba.com , an online platform that connects retailers with drop shipping suppliers.
– Mail-order wholesalers: These wholesalers sell goods to their customers through catalogs or online platforms. They ship the goods directly to the buyers or arrange for delivery by other intermediaries. They usually deal with specialty products that are not available in local markets or that appeal to niche segments of consumers. An example of a mail-order wholesaler is Oriental Trading Company , a company that sells party supplies, crafts , toys , and novelties through its website and catalogs.
– Internet wholesalers: These wholesalers operate exclusively online and use digital platforms to market and sell their products. They may ship the goods themselves or use third-party logistics providers to deliver them to their customers. They usually deal with standardized products that do not require physical inspection or demonstration before purchase. An example of an internet wholesaler is Alibaba.com , a global marketplace that connects buyers and sellers of various products across different industries.
– Manufacturers’ sales branches: These are not technically merchant wholesalers but rather extensions of manufacturers that sell directly to retailers or other buyers in distant markets. They perform similar functions as merchant wholesalers but do not take title to the goods they sell. They usually deal with high-value or complex products that require technical support or customization before sale. An example of a manufacturer’s sales branch is Apple Inc., which operates its own retail stores around the world where it sells its products and offers after-sales service.
Merchant wholesalers are intermediaries that buy goods from manufacturers and sell them to third parties for a profit. They provide various services and benefits to both sellers and buyers, such as reducing costs, increasing efficiency, expanding markets, and adding value. There are different types of merchant wholesalers that specialize in different products, markets, or services. Some examples of merchant wholesaler companies are Costco, Sysco, Readerlink, Doba.com, Oriental Trading Company, Alibaba.com, and Apple Inc.
Global Demand for Merchant Wholesalers
Merchant wholesalers are intermediaries who buy goods from manufacturers and sell them to third parties, such as retailers, businesses, or government institutions. They play an important role in the distribution of goods and services across different markets and industries. According to a report by Grand View Research, the global wholesale market size was valued at USD 33.6 trillion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 5.2% from 2021 to 2028 . The growth of the market is driven by factors such as increasing globalization, e-commerce, and consumer demand for variety and convenience.
Examples of Merchant Wholesalers in Different Industries
There are many examples of merchant wholesalers in different industries, such as clothing, electronics, furniture, hardware, and pharmaceuticals. Some of the well-known merchant wholesaler companies are:
– McLane distributes grocery and non-food supplies to stores, retailers, and restaurants throughout the United States .
– AmerisourceBergen supplies pharmaceuticals, health care products, medical equipment to hospitals, and more to the US and UK markets .
– Core-Mark is one of the largest wholesalers of fresh groceries to convenience stores in the USA .
– Costco is a wholesale club that sells a wide range of products, from food and beverages to electronics and furniture, to its members at discounted prices .
– SendPulse is a marketing platform that offers email, SMS, web push, chatbot, and CRM services to businesses of all sizes .
These are just some of the examples of merchant wholesalers that show how diverse and dynamic this industry is. Merchant wholesalers provide value to both manufacturers and customers by facilitating the flow of goods and services in the economy.
References:
https://marketinglord.blogspot.com/2017/07/types-of-merchant-wholesalers.html
https://www.ranker.com/list/wholesale-companies/reference
http://unstats.un.org/unsd/cr/registry/regcs.asp?Cl=9&Lg=1&Co=6
https://www.grandviewresearch.com/industry-analysis/wholesale-market
https://sendpulse.com/support/glossary/merchant-wholesaler
https://startupbros.com/glossary/merchant/
https://sendpulse.com/support/glossary/merchant-wholesaler
https://www.britannica.com/topic/merchant-wholesaler
https://startupbros.com/glossary/wholesaler/
https://startupbros.com/glossary/merchant/
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