| In the US most of the agricultural products are sold | | | | wholesalers are normally higher than the small scale |
| through wholesale channels. In such a system, small | | | | industries because of their economies of large scale |
| farmers either sell their products in wholesale directly | | | | buying and selling. They also sell their products to the |
| to local grocery stores, food service establishments, | | | | retailers without much time gap because of which |
| natural food stores, or food buying co-ops or to | | | | there is immediate flow of cash, which avoids any |
| buyers who then resell those products, functioning as | | | | event of liquidity crunch for the wholesalers. As a |
| middlemen in the marketing chain. So, when we say | | | | result, they can keep on rolling money and make |
| ‘wholesale’ what do we mean by it or simply | | | | profits. On the other hand, small scale industries are not |
| what is a wholesale market? | | | | efficient enough to sell their products in a short period |
| Well, a wholesale market can be defined as a market | | | | of time from the date of manufacturing because of |
| where the customers buy products in bulk or in huge | | | | their inadequate networking. This increases inventory |
| quantities, but need not be the final customers. They | | | | level and heightens operating costs, which ultimately |
| are actually middlemen between the manufacturers | | | | affects their bottom line adversely. Therefore, it makes |
| and retailers or are retailers themselves who buy the | | | | a lot of sense for the small scale Industries to seek the |
| manufactured products in large lots to achieve | | | | expertise of the middlemen, as discussed above, to |
| economies of scale. These products are then sold | | | | reach their target buyers. |
| either to the retailers or to the final consumers directly. | | | | There is another advantage that wholesale marketing |
| These middlemen are integral for wholesale marketing, | | | | has over the small scale industries and that is |
| since not every manufacturer has the network or | | | | dependence on raw materials. All these small scale |
| ability to reach the final buyers to sell their products. | | | | industries, depending on what products they are |
| The most advantageous aspect of wholesale | | | | manufacturing, are dependent on some or the other |
| marketing is that the profit margin in this type of | | | | raw material. Moreover, most of them do not have |
| business is generally higher than the small scale | | | | any captive source for such raw material instead they |
| markets or the retailers who are the ultimate source | | | | source it from other small and medium-scale industries. |
| from whom the final buyers buy their product. | | | | In this way, they are exposed to fluctuations in raw |
| The working of wholesale marketing is a completely | | | | material prices, which take its toll on their margins if |
| ‘buy’ and ‘sell’ process, where there is | | | | they are unable to pass these price hikes to the end |
| no scope of stocking the goods and then selling it | | | | customers. A wholesaler, being an intermediary only, |
| though in some markets. It is done where the | | | | does not have to worry about any bottom line hit. At |
| wholesaler is directly intending to sell his product to the | | | | the most he can experience some margin contraction, |
| final buyer. As discussed earlier, profit margins of | | | | but definitely minimal losses. |