What are common example of a distribution or wholesale business?
One example of a distribution business could be a fresh fruit and vegetable distributor that might store fruits and veggies at their warehouse in bulk and then distribute smaller quantities to retailers like gas stations, independent retail stores, schools, hospitals, and more. Another common example of a wholesale business could be a reverse logistics business that buys returned merchandise from retailers by the truckload and then sells the merchandise to smaller retailers, Ebay power sellers, and flea marketers by the pallet.
How much does it cost to start a wholesale business?
According to StarterStory's analysis, the average startups costs for a distribution business will be roughly $33,000. Your specific startup costs will vary depending on the business approach you take.
What is the difference between a wholesaler and a distributor?
Generally speaking a wholesaler and a distributor have a very similar business model. Typically both will have product in larger quantities that they sell and or distribute to smaller retailers or customers. One key difference between a wholesaler and a distributor is that a wholesaler will actually purchase the products from the manufacturer or vendor in larger quantities, and wholesale prices, and will then sell the product in smaller quantities to end customers. A distributor on the other hand may not actually purchase the inventory from the manufacturer, they might simply provide a distribution service. The distributor might have existing relationships with end customers that want a vendor's product, so it is easy for the vendor to simply hire the distributor to deliver (distribute) the products to end customers.