Wholesalers are suppliers who connect manufacturers and retailers by buying stock in bulk from the manufacturer for a very low cost per unit, then redistributing it to retail sellers.
They add a small margin to each lot they redistribute to make a profit.
Wholesalers can come in two forms: Light and bulk, each catering to different business's needs.
What is the difference between a light and bulk wholesaler?
Light wholesalers specialize in dealing with smaller clients who spend from around $100-$2000 or so per order. They have established their business especially to cater to the needs of smaller retailers.
Light wholesalers are more than happy to send smaller and sometimes more frequent lots out to their client retailers.
On the other hand, bulk wholesalers are set up to deal with large clients who order in heavy bulk. They often supply to the large chains stores such as K-Mart and Target. These clients will often spend tens of thousands per order which they might distribute across several of their stores.
Some eBay PowerSellers use bulk wholesaler to supply their business. They have reached the point where they can afford a warehouse or large storage space, and invest a lot of capital in their orders!
Wholesalers sell at very low profit margins and rely heavily on selling in heavy bulk to make a decent profit.
Therefore, a bulk wholesaler's business model will often not cater to smaller clients. However, they are certainly something that you could work your way up to using, as they generally offer the best wholesale prices.
Authentic vs. Illegitimate wholesalers
Be careful when searching the internet for wholesale suppliers, as unfortunately there are a few people out there who pose as wholesalers, when really all they are is discount retailers.
Yes, there is a difference!
A wholesaler is licensed to distribute items at wholesale prices, while a discount retailer is not, so they are not able to give you the best prices possible. While there is really nothing unsafe about using a discount retaileras a supplier, it will usually mean you have a hard time making a profit, due to their higher prices.
Determining whether a supplier is the real deal, and not just a discount supplier isn't that hard once
