{"id":9449,"date":"2023-03-22T09:00:00","date_gmt":"2023-03-22T01:00:00","guid":{"rendered":"https:\/\/blog.ninjavan.co\/en-ph\/?p=9449"},"modified":"2023-03-13T17:33:54","modified_gmt":"2023-03-13T09:33:54","slug":"wholesale-and-retail","status":"publish","type":"post","link":"https:\/\/blog.ninjavan.co\/en-ph\/wholesale-and-retail\/","title":{"rendered":"Wholesale vs Retail: Which is the Right Business to Start With?"},"content":{"rendered":"\n

You\u2019ve heard of the terms \u201cwholesale\u201d and \u201cretail\u201d thrown around, especially when it comes to pricing. But if you\u2019re a new business owner, these are two basic terms you need to become closely<\/em> familiar with. <\/p>\n\n\n\n

Why is it that wholesale prices are lower? Why are retail prices higher, but allow you to buy in smaller amounts? And which is the perfect business model for you? <\/p>\n\n\n\n

You may have many questions, but it\u2019s time to put your fears aside because we are here to help. <\/p>\n\n\n\n

Also Read:<\/strong> <\/em>O<\/em><\/strong><\/a>nline Business Ideas You Can Start with PH100K<\/a><\/em><\/strong><\/p>\n\n\n\n

Wholesale and retail, defined<\/strong><\/h2>\n\n\n\n

The main difference between wholesale and retail businesses is their target buyers: Is it another entrepreneur looking for a supplier or a shopper looking for office clothes? <\/p>\n\n\n\n

This is critical in understanding the difference between wholesale and retail, and which kind of business model works better for you. <\/p>\n\n\n

\n
\"difference
Wholesalers and retailers have different target markets.<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n

Wholesale, in the simplest terms, is the business of selling items in bulk<\/strong>. The target buyers of wholesalers are retailers<\/em>. Since they\u2019re not concerned with marketing, packaging or advertising the goods, wholesalers (also called suppliers) can sell the items for a lower price. <\/p>\n\n\n\n

Retailers, on the other hand, are the ones that sell directly to consumers<\/strong>. They find the right wholesaler or supplier for their store, pack the items individually, and build a brand so people will recognize their store. <\/p>\n\n\n\n

Because of the costs incurred from shipping, packaging and marketing, the goods are sold with a significant markup. <\/p>\n\n\n\n

Different types of wholesalers and retailers<\/strong><\/h2>\n\n\n\n

Like any other business, there are different types of wholesalers and retailers. Let\u2019s briefly take a look at them:<\/p>\n\n\n

\n
\"wholesaler
Wholesalers supply products to other businesses that will distribute <\/em>
or sell them to retailers.<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n

Types of wholesaler business<\/h3>\n\n\n\n
    \n
  1. Manufacturer wholesalers<\/strong>. They manufacture the goods themselves and distribute them to wholesalers.<\/li>\n\n\n\n
  2. Pure wholesalers<\/strong>. They don\u2019t engage in production or retailing and only focus on distributing to the products retailers<\/li>\n\n\n\n
  3.  Retail wholesalers<\/strong>. They mix wholesale and retail by selling to direct consumers as well, which provides a higher margin of profit but requires the marketing efforts of a retailer.<\/li>\n<\/ol>\n\n\n\n

    There are many other categories that fall under wholesaling, but all of them are under the umbrella of the concept of selling items in bulk. <\/p>\n\n\n\n

    Types of retail business<\/h3>\n\n\n\n

    While wholesalers tend to focus only on specific items to sell, retailers focus on acquiring products based on the consumer type(s) they want to target.  Meaning they can sell different varieties of goods in one place.<\/p>\n\n\n

    \n
    \"retail
    Retailers sell directly to consumers whether online or in-store.<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n

    Retailers are usually:<\/p>\n\n\n\n

      \n
    1. Department Stores<\/strong>, which carry multiple brands of clothing, appliances, bags and other dry goods. SM, Robinsons, and Rustan\u2019s are three of the biggest department store chains in the country.<\/li>\n\n\n\n
    2. Supermarkets<\/strong>, which acquire thousands of grocery items from hundreds of wholesalers to make it convenient for their customers. <\/li>\n\n\n\n
    3. Specialty boutiques<\/strong>, which can sell goods ranging from beauty to health to other interests and are usually located in malls. <\/li>\n\n\n\n
    4. E-retail<\/strong>, which are individuals or businesses offering products online, or through ecommerce.<\/li>\n<\/ol>\n\n\n\n

      Another type is the catalog or non-store retailer, which was more prominent in the late 1990s to 2000s. You may remember those Avon <\/strong>products that many moms or working women did as a  side hustle, selling directly to people using a product booklet. <\/p>\n\n\n\n

      For retailers with stores, their shops are usually located in strategic places with heavy foot traffic, so as to encourage buyers to stop by and get an item or two. Retailers are found either online, offline, or both, for maximum reach. <\/p>\n\n\n\n

      Wholesale pros and cons<\/strong><\/h2>\n\n\n\n

      Being a wholesaler can bring in big profits, but there are some things to consider:<\/p>\n\n\n\n

      Pros:<\/h4>\n\n\n\n