What is the differences between wholesale and retail?

Updated: 10/28/2022
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Wiki User

10y ago

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Retailer buys from wholesaler and sells to customer.

Retailer has costs, (like rent, employees, taxes, loss/breakage, advertising, etc.) and needs to make a profit (which is the reason they are in business). Those added items must be placed on the price charged the customers, above what the retailer paid for the product.

Many costs a wholesaler incurs don't change much, if selling one or a thousand of something (say the phone bill, or clerks payroll for taking an order are the same if for 1 or 100 of something). So, as long as they sell a lot of something, they can sell it for less than if they sold one of it. Hence, the wholesale price is for wholes (or large) quantities. Wholesale is a bulk sale by a manufacturer or distributor to for resale to a retailer. Retail is any sale to an individual or company for end use. In almost all states it is illegal to sell wholesale to an individual, or claim to sell wholesale when it is for end use and not for resale. Also in most states wholesalers may not sell to the public. Wholesale sales do not carry sales tax, as sales tax is charged to the end user. Thus is a "wholesaler" were to sell an individual something and charge the sales tax it would be by definition a retail sale and it would be deceptive to claim that it was a wholesale sale or that the merchant was a wholesaler. It is unethical for some one to break the law. One should strongly consider whether or not one should do business with any unethical party as it is likely if that party bend or break the rules he or she is more likely not to be honest with you or honor warranties etc. End result, you get what you pay for.

Retail is marked up from the price the wholesaler sold it for to the retailer. The wholesaler usually gets their goods and pricing from the manufacturer which is marked up as well.

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Winston Stehr

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1y ago
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Q: What is the differences between wholesale and retail?
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