What are the key differences between retail and wholesale?
To summarize the key differences, retailers sell goods directly to the end-user, typically in small quantities. Wholesalers, on the other hand, sell goods to other store owners and others in the retail industry who then turn around and sell the goods to the end user. Wholesalers sell a large number of products at a time.
If you’ve ever heard of the terms B2B and B2C, they are especially relevant when discussing wholesalers and retailers. B2B stands for “business to business.” B2C stands for “business to consumer.”
Retailers participate in B2C transactions. They receive a product from another business, a wholesaler, and sell it to consumers. Wholesalers engage in B2B sales. They receive a product from a manufacturer (or manufacture products themselves) and sell them to other companies.
There are a few other differences between wholesalers and retailers. For one, there is much higher competition between retailers, and retailers care significantly about the customer experience.
For instance, if you’re shopping for a product, you would likely shop around to determine where you can get the best price. You may choose to shop at a particular store for other reasons, such as their location or their customer service.
There is much less competition when it comes to wholesalers. You may only find a handful of wholesalers compared to hundreds, if not thousands, of retailers.
Use General Mills as an example again. General Mills produces cereals and distributes them to grocery stores. Sure, there are other cereal manufacturers. But according to Food Industry, there are nearly 40,000 grocery stores in the United States .
Furthermore, retailers typically need to worry about advertising costs, while this is not the case with wholesalers. Wholesalers typically only deal with limited products as well, where retailers tend to handle many different products at one time.