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Who are distributors, wholesalers, retailers and consumers?
Different entities in a supply chain
Differences between a distributor and a wholesaler
Who is a manufacturer?
Who is a distributor?
Who is a wholesaler?
Who is a retailer?
Who is a consumer?
Who are the entities involved in a supply chain?
Marijuana packaging wholesale supplier
Wholesale supplier for smoking equipment
Differences between distributor, wholesaler and retailer
What are the key entities of a supply chain?
Where should I buy wholesale marijuana packaging?
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MJ Wholesale as your wholesale partner
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Manufacturers are the starting point of every supply chain. They are business entities that use raw materials to create finished goods. However, they must ensure that they sell the finished goods on pace with their production schedule else they could end up with a massive inventory for way too long, leading to wastage or spoilage. They often depend on distributors to place large orders with them to keep the production process running.
Distributors work directly with manufacturers of the product. They work as the manufacturer’s direct point of contact for the prospective buyers. Many distributors maintain buying agreements with the manufacturers that gives them a monopoly over a certain territory or limits the number of participants who can buy that particular product from manufacturers. However, distributors don’t directly sell manufacturer’s goods to the consumers. This is because they generally acquire a large quantity of product from the manufacturers and look to sell them in large quantities. Distributors work with wholesalers, who again, buy large quantities of products from them. However, sometimes the distributors do directly work with retailers too.
Wholesalers buy products from the distributors in large quantities. The high-volume purchase orders that they place improve the wholesaler’s buying power significantly. Even the distributors go ahead and provide discounts over the number of items purchased or a particular amount spent to further boost their sales. Wholesalers generally purchase all kinds of merchandise, right from electronics to bicycles, from clothing to furniture, from smoking equipment to food from distributors. The wholesalers then sell these products to retailers, which can be brick and mortar stores or online e-commerce stores as well.
Retailers source their products in bulk quantities from a distributor or a wholesaler. Retailers sell these products directly to consumers. They do this by searching and stocking on products that coincide with their business objectives and ideologies. They are always on the lookout for great deals and suppliers with the most competitive pricing.
The consumer serves as a key figure in the supply chain. Also known as the end user, they are entities that purchase products primarily for consumption and not for resale or commercial purposes.
Differences between distributors, wholesalers and retailers
The main difference between these entities is the quantity of products they buy and who they buy it from.
Another difference between these entities is who they sell their products to. Like wholesalers sell the products to retailers while distributors sell their products to wholesalers, retailers and consumers too. Retailers sell their products directly to the consumers.
The serving area of a wholesaler is limited compared to the serving area of a distributor.
A distributor enters into a contract with the manufacturers while the wholesaler does not need a contract with them. This enables the wholesaler to sell products of competing nature to the retailer by different manufacturers or distributors.
Important points to consider
- Many a times new businesses or small businesses manufacture and directly sell their products to the consumers. Often, many entities of the supply chain like distributors or wholesalers are left out to save money and time. But this can cause a problem in the long run and alienate those entities.
It is important to determine which business model to use and why. Whether you fit in as a manufacturer, wholesaler, distributor or retailer can be determined using market research, business strategies, business relationships and forecast.
Why Buy Wholesale?
In a highly competitive market such as that of cannabis, all stores and dispensaries already put out the lowest prices on their products to beat their competitors and get better sales. Also, the truth is that no consumer wants to pay ‘extra’ for packaging. This fact increases the costs of procurement for dispensaries, smoke shops and head shops, because they have no choice but to invest in good quality packaging to protect their product. Selling at low prices and procuring at high costs can cause a dent in your profit margin. This will result in huge losses and can even cause a shut down in the long run. However, with the right wholesale partner you can offer low prices and reduce costs of procurement at the same time. It is crucial to choose a reliable, trustworthy and reputable wholesale partner.