There are many traders who buy the products in bulk quantities directly from the manufacturers. They have many advantages in doing so. This is true concerning any kind of products they deal with. Many industries including wholesale food suppliers procure stuff in bulk at economical rates. In the following write up we will look at what is bulk buying and what benefits it offers to wholesalers.
What is bulk buying?
This is a concept in which goods are purchased in bulk by a trader who is also called a wholesaler. A large quantity of goods is procured at a price lesser than the unit price of the product. The wholesale dealer buys goods in bulk and sells them in smaller quantities to various small traders or direct consumers. He has a dedicated space to store the bulk stock and makes provisions to keep replenishing the stock. They have supplies all round the year making it beneficial for other small dealers to buy from them.
Advantages for wholesalers:
- Direct contact with manufacturers: The wholesale dealers can have direct contact with the manufacturers since they buy goods directly from them. The manufacturers are not in a position to reach out to the consumer directly as they are spread across a vast nation. The wholesalers are the ones who take the product to the consumers through the small traders. Due to their approachability, they are also able to take the feedback straight from the field to the notice of the manufacturers.
- Easy access to more variety of goods: Since the wholesale dealers have the space to stock goods, they can easily access a variety of goods. The small retail sellers do not have much space and this is the reason they buy in small quantities either weekly or monthly. They cannot afford to have a variety stocked. But space constraint is not there for wholesalers. They can request manufacturers to provide them with more quantity of goods with no extra cost.
- Lesser cost: Since the wholesale food suppliers are buying goods in bulk they can negotiate and get a good deal in cost. They can buy at a lesser cost and sell at a profit to the retailers. The manufacturers also let these people know of any new product launch so that they can have an advantage in the market. The overall cost to the wholesalers becomes less.
- Marketing is not an issue: The wholesalers do not carry out any marketing for the products. It is the task of the manufacturers and the wholesalers act as a bridge between the manufacturers, retailers, and customers. Their role is very specific and outlined clearly.