Wholesale business and trade

Businesses engaged in the wholesale trade have an intermediate place in the distribution chain, between
producers and consumers of goods. They purchase and resell goods, such as the output of agriculture,
mining, or manufacturing, generally without making any substantial changes to the goods. Some of the
purchasers of the goods are retailers or other wholesalers. (The term jobbers is sometimes used for
wholesalers who specifically serve retailers.) Other purchasers use goods such as industrial machinery or
medical instruments to produce goods or provide services. Still other purchasers are processors who
transform raw or semi-processed materials into goods of greater commercial value.

Wholesalers operate out of offices or warehouses. The warehouses are temporary storage facilities;
unlike a retail store, they are not designed to display merchandise and do not encourage walk-in traffic.
Wholesalers do not advertise to the general public. They contact their customers by telephone, sales
workers, industry-specific advertising, or electronic media. They tend to create long-term relationships
with purchasers, becoming regular suppliers with strong ties.

Wholesalers earn their revenue by charging buyers slightly more than they have paid sellers. Buyers are
willing to pay this markup because wholesalers serve as a single point of contact where goods are
available from multiple producers. For example, a food market needing eggs, milk, fruit, vegetables, and
meat can buy from one wholesaler rather than identifying, negotiating prices, paying, and arranging
shipping with the countless different farms that produce these agricultural goods. Wholesalers also
relieve purchasers of the burden of warehousing goods that are not needed immediately.