Chapter 11.3, Problem 4R

To determine

To state: The difference between retailer and wholesaler.

Explanation of Solution

In the distribution process, retailers and wholesalers form two major components. Retailers sell goods to the end users in a limited quantity at a higher price whereas wholesalers sell goods to retailers in bulk but at cheaper prices. This makes the size of the business of wholesalers larger than that of the retailers. Since they have larger business size they need more capital compared to the retailers.

Retailers generally have limited space whereas wholesalers have outreach across the states. Promotional strategies form the main source of awareness among the customers whereas business promotion is not needed for wholesalers. Attractive displays and offers are mandated by retailers but these are not required by the wholesalers. This leads to a lower cost of goods for wholesalers whereas the cost of goods is comparatively high for retailers.

Economics Concept Introduction

Introduction:

Retailer- the ones who sell goods to their customers in relatively small quantities which are meant for direct consumption or use instead of resale are known as retailers. They make bulk purchase and sell in single or small units to their customers.

Wholesaler- these people typically sells goods to the retailers in large quantity at low prices. They get the supply of goods from the manufacturer and make supplies to the retailers in bulk. These supplies are generally not meant for direct consumption or use but to make a further supply to the ultimate consumers.