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Things About Wholesale Business Your Boss Wants to Know

Being fully equipped with vital information that your boss needs to run their wholesale business successfully is crucial. This can make you productive and attain better results for the business and personal growth.

Let’s discuss some essential aspects of a wholesale business you need to know. It’ll impress your boss, help you stand apart from other employees, and also expand your knowledge of wholesale businesses.

What is a Wholesale Business?

A wholesale business is a business-to-business (B2B) model in which you sell products in bulk for profit. The process is as follows:

  • Buy a large quantity of a product directly from a manufacturer or a distributor
  • Set a cheaper price of a product than the retail price per item
  • Sell products in a larger quantity to a retailer or a consumer

Supply chain management

The wholesale business model is part of a diverse supply chain. It begins with the manufacturing company. A manufacturing company prepares a product. The manufacturers sell products to either distribution firms or direct wholesalers. Similarly, wholesalers can buy directly from other wholesalers or through distributors.

Wholesalers then sell products in bulk at cheaper prices to generally retailers or sometimes end consumers. However, because the wholesale industry requires a large amount of storage space, there is an urgent need to modernize your storage facility; hence, you may look into some of the most inventive Modula storage systems to find unique solutions for your warehouse.

Order Fulfillment

There are two ways of wholesale order fulfillment:

  • Keep items in a warehouse
  • Directly ship items to retailers without stocking them

Warehouse management

Wholesalers rent out a warehouse to store the stock bought from manufacturers. Currently, there are a total of 19,190 warehouses in the USA according to Statista in 2020.

There are many expenses of a warehouse including:

  • Rental charges
  • Labor costs
  • Security
  • Maintenance of items


According to the latest industry research, warehousing has been a profitable venture for small businesses in the US. In 2021, Statista reported that the warehouse industry generated an estimated revenue of about $34.4 billion.

There are many benefits of warehousing for a wholesaler. These benefits include:

  • Accessing and managing items in the inventory
  • Keeping seasonal or additional items in storage space. This lets sellers easily send these items whenever buyers demand these products.
  • Monitoring the complete supply chain
  • Shipping directly to retailers
  • Tracking the sale and purchase of inventory.


Warehousing has some issues like overstocking where your number of stock exceeds your requirement. According to a report published by Reuters last month, wholesale inventories have increased by 2.2% while sales have slowed down. 

Your stock is dead if:

  • It is damaged
  • It is expired
  • It is left unsold and the trend expires

Wholesalers can avoid these issues by using the best automated:

  • Inventory management software to manage inventory and:
    • Analyze the high-selling products
    • Forecast future outcomes based on previous data and current market trends
    • Notify about the requirement to add more products to prevent stockouts and overstocking
  • Warehouse management software for:
    • Labor management
    • Order processing
    • Key performance indicators for staff to improve productivity


Dropshipping is a process where wholesalers do not keep inventory by themselves. Retailers place orders and manufacturers or distributors directly send the stock. Sellers play the role of intermediaries in dropshipping. Sellers earn their commission with minimal investment.


Dropshipping is a very profitable business model. According to a statistical analysis by Statista, the estimated value of the global dropshipping market was $128.6 billion in 2020.

Dropshipping is very beneficial for wholesalers as it:

  • Reduces the costs of:
    • Renting a location to store inventory
    • Buying inventory
    • Hiring more staff to oversee inventory
  • Saves time in maintaining or tracking inventory
  • Eliminates the shipping problem by outsourcing shipping
  • Provides flexibility as sellers can run their business anywhere online


While it provides a lot of benefits, dropshipping also puts a seller at some disadvantages such as:

  • No control over inventory
  • Poor management of customer complains
  • Less profit
  • Dependency on third-party’s suppliers

Wholesale eCommerce

The advanced technology has opened up new opportunities for wholesalers which they can explore to expand their business. With so many online platforms, wholesalers can run their online businesses. They can either set up their own websites or begin selling on marketplaces.

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According to the latest research by industry experts, B2B eCommerce is on the rise. According to Digital Commerce 360, online sales on the B2B eCommerce platforms amounted to $1.39 trillion in 2021, 17.8% up from the previous year. Now 65% of the B2B companies are transacting online in 2022 according to McKinsey & Company research.


Wholesalers run their businesses through online websites. You can promote your business online and gain many benefits.


An eCommerce website helps you:

  • Avoid competition by promoting just your own business
  • Earn maximum profit
  • Establish your own brand
  • Facilitate direct communication with your buyers
  • Gain maximum control over website features, navigation, and design
  • Implement payment gateways and shipping methods according to your requirement
  • Prepare a list of customers to retain them for future advertising


Websites can generate better sales leads and revenue. However, it is not as easy as you think. It requires a lot of effort to build a website. You have to:

  • Spend a lot of time building websites and generating traffic
  • Invest in:
    • A cloud hosting server and domain
    • Implementing good UI and UX designs
    • Promoting your website via search engines and social media platforms


It is not possible for every wholesaler to set up his own website. It is an expensive process. They can switch to marketplaces. A marketplace is a place where buyers gather to buy products. Sellers can easily sell to buyers through marketplaces.

Some marketplaces deal in a huge catalog of products such as Alibaba, SeeBiz, and eWorldTrade. Others sell products of a specific niche. Examples include:

  • Alibaba

Alibaba is the world’s largest online marketplace, with over 500 million active users. The site offers a wide variety of goods and services, including wholesale products. Alibaba is a great option for businesses looking for a one-stop shop for all their needs.

  • SeeBiz

SeeBiz is a great wholesale marketplace for buyers and sellers to connect. With this marketplace, you can find a wide variety of products at wholesale prices. If you’re looking for a wholesale marketplace that offers a great selection of products at competitive prices, SeeBiz is the place for you.

  • eWorldTrade

eWorldTrade is one of the world’s largest online B2B marketplaces. With over 10 million registered users, eWorldTrade offers a unique opportunity for businesses to connect with international buyers and suppliers. 

eWorldTrade has a wide variety of products and services available, making it easy to find the right product or service for your business.


The benefits of marketplaces are:

  • Built-in storefront
  • Marketing by the marketplace with less investment
  • Automated payment and order fulfillment
  • Easy availability of many customers


There are some limitations on marketplaces that do not provide effective results like one’s own eCommerce website. For example:

  • Competition from other sellers and even marketplace
  • Lower profits due to setting up lower prices on products to stay ahead of competitors


With the above-mentioned information about the wholesale business, you can not only benefit your organization. This will help you become an irreplaceable asset to your company. On top of that, it’ll even prime you to start thinking of starting your own business one day. 

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