Wholesale marketing occurs when a producer of a good sells it to an individual or company that intends to resell it. The good is usually resold under a different brand name. Wholesale networks help to connect potential buyers and sellers with each other. This is common in industries that deal with commodity goods such as agriculture and fuel.
Manufacturers that produce and market a line of commodity goods, such as gasoline and diesel fuel, may sell excess supply to third-party dealers. This is what is referred to as wholesale marketing. In this case not only is the producer selling the good under its own brand name, but it is allowing other firms to purchase its goods and resell them under their own. Sometimes this occurs in the retail food industry when name brand manufacturers also produce store brand products.
Many local farmers and mid-sized agricultural producers participate in wholesale marketing. They produce crops and sell them to a number of buyers that may represent local or large grocery chains. These companies then resell those crops to their own customers. The local agricultural producer also retains the right to sell some of its own produced goods locally, perhaps at a farmer's market or directly from its farming locations.
Farmers' markets are a type of wholesale marketing. Consumers are able to go to a central location where they can purchase goods directly from the producer or manufacturer. This can often save money as the added distribution costs and retail markups are avoided. In addition to farmers' markets, there are a variety of trade magazines that allow businesses to purchase goods directly from the manufacturer.
There are some companies that specialize in wholesale marketing. They act as a middleman between the manufacturer and the retailer. These companies may offer a complete set of services to the manufacturer, including packaging, storage and distribution. A wholesaler will usually charge additional fees for these activities, which is often reflected in the product's final selling price.
Unless they manufacture their own goods, retailers are dependent on wholesale marketing. Some goods may be delivered directly from the manufacturer; however, the majority is obtained from wholesale companies. In the case of a large retail chain, its corporate buyers often determine the mix of goods that will be offered in its store locations. These decisions are usually made by region. Small, privately owned businesses may belong to a national affiliated network to receive discounts and access to products they might not have the buying power to secure on their own.
