{"id":8275,"date":"2026-02-18T12:08:47","date_gmt":"2026-02-18T18:08:47","guid":{"rendered":"https:\/\/www.blockadvisors.com\/resource-center\/?p=8275"},"modified":"2026-02-18T13:20:28","modified_gmt":"2026-02-18T19:20:28","slug":"what-is-wholesale","status":"publish","type":"post","link":"https:\/\/www.blockadvisors.com\/resource-center\/manage-your-business\/what-is-wholesale\/","title":{"rendered":"What is Wholesale? Definition, Types, and How Wholesaling Works"},"content":{"rendered":"\n

When it comes to buying and selling merchandise, wholesale<\/em> and retail <\/em>may be terms you hear often. But what\u2019s a wholesale business model and how is it different from retail? Which model should you elect for your new business venture? Wholesale plays an important role in the supply chain for both businesses and consumers. Whether you\u2019re starting your first business or you\u2019re a seasoned business owner, keep reading to learn more about wholesale, how the wholesaling model works, and tips for increasing your sales.<\/p>\n\n\n\n

What is wholesaling and how does the wholesale process work?<\/h2>\n\n\n
\n
\"wholesale<\/figure>\n<\/div>\n\n\n

In a wholesale business model, you purchase products in bulk from manufacturers. Then your company sells those products to retailers, who then sell them directly to consumers. You can think of wholesalers as intermediaries between manufacturers and retailers. Most wholesalers don\u2019t produce the goods they sell themselves. Instead, they buy them from a manufacturing source. This allows wholesale businesses to focus their efforts on the sales and delivery aspects of wholesaling.<\/p>\n\n\n\n

Wholesalers purchase goods from manufacturers in bulk, usually at a discounted rate. Then, wholesalers sell the goods to retailers at a higher price to make a profit. However, this price still offers a bulk discount to the retailer overall. Then, the retailer sells the goods to the customer at an additional mark-up. Buying in bulk allows wholesalers to purchase products at a discounted price and then sell to retailers at a higher price. This is how wholesalers make a profit. It\u2019s more cost-effective for a wholesaler to buy in bulk from a manufacturer than it would be to buy the items individually. Wholesalers often specialize in a single product or category or can offer a variety of products.<\/p>\n\n\n\n

This process enables the distribution of merchandise from manufacturers to retailers. Wholesaling is one part of the supply chain. Wholesalers typically have a smaller profit margin<\/a> than the retailers they\u2019re selling to. Wholesale companies are typically B2B (business-to-business), and they typically sell to retailers. This is where the difference between wholesale vs retail can get muddied, but we\u2019ll cover that in more detail later.<\/p>\n\n\n\n

<\/div>

Take the stress of bookkeeping off your plate<\/h3>

Get expert bookkeeping for up to 50% less than a typical accountant.<\/p>

\n
Learn more<\/a><\/div>\n<\/div><\/div><\/div>\n\n\n\n

Wholesale definitions<\/h2>\n\n\n\n

Wholesalers play an important role in the supply chain by bridging manufacturers and retailers, ensuring efficient distribution, bulk sales, and often offering services like storage, shipping, and product assortment. First, let\u2019s explore common definitions of the supply chain so you can better understand where wholesale falls into the mix.<\/p>\n\n\n\n

What is wholesale price?<\/h3>\n\n\n\n

Wholesale price is what manufacturers charge for bulk orders. It\u2019s the cost paid by the retailer to the wholesaler. By purchasing in bulk, wholesalers can request a significant discount from the manufacturer, profiting from retail markups. Retail markup refers to the difference between a retailer’s price for a product and its wholesale price.<\/p>\n\n\n\n

Wholesale price vs retail price<\/h3>\n\n\n\n

Goods are purchased and sold at different prices in a wholesale business. This can make the difference between the wholesale price vs the retail price confusing. Because wholesalers can take advantage of economies of scale, the wholesale price is often lower than the retail price.<\/p>\n\n\n\n

The retail price is the cost the retailer charges to the end consumer. This price will be higher than the wholesale price because it includes the retailer\u2019s costs like shipping costs, rent, staff wages, and profit margin. Adding a retail mark-up to the wholesale price allows retailers to cover their costs and make money.\u00a0<\/p>\n\n\n\n

Wholesale vs distributor<\/h3>\n\n\n\n

Wholesalers and distributors commonly get mixed up, but are often separate groups. The difference between wholesalers and distributors is tricky as they both interact with manufacturers and retailers, but they have different purposes. Wholesalers and distributors both play crucial roles in the supply chain, but their functions and relationships within the chain differ. Let\u2019s further examine the difference between wholesale vs distributor:<\/p>\n\n\n\n