As a small business, choosing whether you’re looking to wholesale or retail is one of the bigger decisions you will make that will continue to have an impact on your business in the long run. Whether you choose to wholesale clothes or retail them, in order to know the best for your business according to your business plan and budget, it’s necessary to know what exactly the outcome of opting for either could have on your business.
Speaking of retail businesses, they initiate the sale of goods directly to the customer. With no secondary person’s involvement, a variety of products can be sold through numerous distribution channels. You can choose to turn your business into a departmental store or an online store and opt for the right suppliers related to the same. The benefit of being part of the retail business is the diversity it has to offer. Your services and communication are not limited since the main role you have to play are that of the middleman. Handling both supply and import, retail businesses tend to deal with smaller amounts of ‘final’ products.
Wholesale businesses, on the other hand, sell products to businesses or other outlets. They don’t tend to deal with customers directly and sell heaps of products at a lower rate. The more you buy, the lesser you’ll end up paying. As a wholesale business, the product you supply remains consistent even with the passage of time. Even though wholesale businesses tend to stick to a particular genre of supply, they can grow to expand their business into manufacturing, as well as retail. Depending on how much growth your business is capable of, this can either be a short-term or long-term goal for the business. Honeydewusa.com is an example of a wholesale business that acts as a kids clothing distributor and deals with customers themselves. With the option of buying the goods in bulk, Honey Dew functions as a wholesaler, retailer, and manufacturer, all at once, through an online business.
The main difference between the two types of businesses is that one is B2B and the other is B2C. B2B refers to business to business transactions. Wholesale business generally engages in these through the supply of raw materials like natural stone to architects. With no involvement of the actual customer that’s looking for the construction of a kitchen countertop or the use of the same as floor tiles, it is a closed deal that occurs strictly between the two businesses. In this way, one business is able to help the other through the provision of raw materials and even final products.
However, when it comes to B2C, i.e. business to customer negotiations, the business deals with customers directly. In the form of shops and online stores, the final product is displayed in front of any potential customer and can be sold off immediately. There is no need for the involvement of a third party.
If we were to compare the two businesses on a more competitive scale, the retail industry is easily much more competitive. With cut-throat competition taking over stores, maintaining customer relations becomes an important part of the job in order to ensure that your business is doing better than the others. With no room for errors, the retail business is definitely not for the light-hearted.
However, in comparison, the wholesale industry hardly holds any competitive values. With only a handful of wholesalers in the market, there is no scope for competition in the air and is a much more relaxed industry as compared to the retail business. Depending on what you want your business’ plan and budget to be, you can choose the option that you think is best for you.
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