Wholesaler refers to the channel of distribution. It is the complete flow of goods and information from the manufacturer to the end user. Wholesalers are also called as distributor gets the products from the manufactures, keeps them in the centre and then distributes to the retailers.
The concept of Wholesale marketing works this way – A manufacturer or producer of goods or product sells the product to a company which is, in turn, a wholesaler. The company then sells the products or goods to the end users or customers with the company’s brand name. This kind of system has a great advantage in terms of investment. The company will be helped with this kind of marketing. The company who carries out the business will get connected with many wholesalers for various kinds of products.
4 Benefits of Wholesale Marketing
1) The company makes more money
In wholesale marketing, the purchase is made in bulk from the manufacturer of the product directly. There is no middle person involved here. Hence paying for the middle person does not exist in this model. The manufacturer will have its price. The manufacturer will expect that the products will have to be bought in large quantities. Hence, by purchasing in bulk quantities directly from the manufacturer, the average cost per product will be less. The company can set its own hike for the product and earn profits.
2) Create the company’s brand
Wholesale marketing usually involves the products being rebranded under the company’s brand. Example – A department store getting the groceries and then selling it with the store’s brand. In the real world, the role of the manufacturer will be invisible and that of the company will be noticeable.
3) The company builds a network of suppliers
Wholesale marketing will lead to connecting with many manufacturers to check whether to purchase from them based on price etc. It is better to be connected with many manufacturers for a single product and then analyzes the product priced and quality before purchasing in bulk from the manufacturers.
4) Company can expand
When the company’s brand grows up and gets recognized in the market, the company can expand to other products by analyzing the demand of the market. At this stage, the company’s business will expand and also be secured when people prefer to buy the company’s new products.
3 Strategies for wholesale marketing
Like any business strategy, it is important to form a wholesale marketing strategy in order to succeed in wholesale business. Let us discuss the various strategies in wholesale marketing.
- Formulate the wholesale marketing strategy–Marketing plans need not always be set of documents. Spending time to form the wholesale marketing strategy will improve the ability to gain customers to a large extent and will eventually lead to consistent sales. The company’s marketing strategies should contain many small tactics which when joined will create a flow that will direct the business towards the right direction. Few points that be taken care is to create a social media post, to create a company website, give a local advertisement, direct mail and so on.
- Focus on the marketing strategy – Once the marketing strategy is set, focus on the 3 main areas – get new wholesale customers, get more orders from the customers, increase the sales from the wholesale business.
- Wholesale promotion ideas for getting more orders – It is a great challenge to get the wholesale customers to register. There are many wholesale promotions methods that can be used to encourage the wholesale customers to connect with the company. There could be many barriers like unawareness of the product, shipping charges, minimum orders, process of ordering, unaware of the terms and conditions and lack of sales support. Keeping this barrier in mind, the wholesale promotions should be targeted by making the customers be aware of the product, orders etc.
Types of Wholesale Marketers
The three main types of wholesale Marketers are:
1) Merchant wholesalers
They are companies that are engaged mainly in buying, storing and handling the products in bulk and then reselling the products in the small amount to retailers or to any other wholesalers. They are known by different names like the wholesaler, distributor, jobber, supply house, importer etc.
Agents also called brokers are independent middlemen. They will be involved in negotiating and included in other activities like buying and selling on behalf of the clients. They will be remunerated for the service in form of commission based on their sales or purchase. This type of wholesaler is popular with manufacturers who have limited capital and those who cannot maintain enough sales forces.
3) Sales branches of manufactures
Manufacturer will maintain many branches and offices that will be owned and maintained by the manufacturers. These offices will be used mainly for the purpose of distribution of the products of the manufacturer which will be at the wholesale level. Some will maintain a facility for warehousing and some for sales.
Examples of wholesale marketing in India
In the Indian FMCG, the following are the wholesale marketing companies:
- Metro – Metro cash & carry started its business in the year 2003. The company takes care of 24 wholesale distribution centers across the country. Its customers include small level retailers, hotels, corporates, kirana stores etc. Metro allows only business customers to purchase from them. The customers are registered with them and are provided a customer registration card. Metro is well equipped and it is able to accommodate the needs of all types of customers. It offers various products like fruits, vegetables, groceries, bakery products, frozen food, beauty products, healthcare products, electronics and clothing all under a single place and at a low price. Metro takes care to provide quality products to the customers.
- Walmart India – Walmart India owns about 21 stores across India and offers about 5000 products. They are the world’s foremost retailer. It is known for its efficiency and expertise in supply chain management, sourcing, and logistics. It started its operations in the year 2009 in Amritsar. It is a membership-based wholesale store that offers registration card to the customers. Walmart started B2B platform in the year 2014 and provided the facility to kirana store members, offices, institutions, hotels and other business people. It provides them with online shopping features.
The wholesale means to sell products or goods in large quantities. Basically, wholesaler provides a very important connection between the manufacturer and the retailer. The manufacturer will require many wholesalers to sell and market their products. Wholesalers will also be making use of manufacturer to market their brands and to flourish their business.
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Yogesh Shinde says
Really useful article.