Wholesale Distributors and Wholesale Distribution

Wholesale distributors play an important role in any type of sales, whether it is retail, direct marketing or Internet sales. Wholesale distributors purchase or receive products from various manufacturers. They then home-grade these products to their distributor warehouses and distribute them to retailers, distributors and end users. As you can imagine, because wholesale distributors have so little to no interaction with the consumer, wholesalers and drop shippers often fail to meet their financial obligations to consumers.

There are two main types of wholesale distributors: direct marketers or direct suppliers and middlemen. The difference between a direct supplier and a middleman is that a middleman acts as a third party between the wholesalers and retailers, while also acting as an agent on behalf of the retailer. The major difference between a direct wholesaler and a middleman is that a middleman does not actively search, buy, and sell the product to the customer, but instead works with other companies to pass the product through their distribution systems. It should be noted that distributors do have the ability to directly source products to retailers, but this is typically done by purchasing from manufacturers who will then pass the product on to the wholesalers.

In today’s economy, many manufacturers are downsizing and some are closing their doors completely. Many new manufacturers that have just begun operation are cutting back on their manufacturing facilities and hiring wholesalers to carry the load. This means that wholesalers who want to make the most money possible without having to deal with a large amount of extra overhead can take advantage of wholesale distribution to get products at a very low price and then sell them for a higher price to retailers or to other customers.