The factors that make retailers get greater profits than wholesalers because they are free to determine prices, wholesalers certainly have more competitors, while retailers can sell in places that cannot be reached by wholesalers and of course with smaller quantity so it is natural that retailers get more profit high than wholesalers.
Retailers will get a higher price, but that doesn't mean they'll get a higher profit. Retailers cannot sell in bulk like wholesalers, they can only sell in small quantities, so to make a profit they need to sell at high prices. In short, retailers cannot make as much profit as wholesalers and without wholesalers, retailers will also have difficulty sourcing. 
Topic: Retailers make more profit than wholesalers during inflation. - page 2. (Read 678 times)
December 16, 2022, 12:51:07 PM
December 16, 2022, 12:48:52 PM
I think things that make retailers get greater profit because they can sell directly to the last consumer, this makes them able to raise higher prices than wholesalers, of course this is an effective market strategy for getting big profits.
Being retailers and wholesaler have their own advantage and disadvantages, in wholesalers or suppliers price they were able to sell their items in bulk and will not fear to have them just stock in their storage since their target is to sell more to earn. They’re into having volume to get a bigger profit. The more they sold fast their item the better for their businesses. In retailing it will require more effort to introduce the product and will requires time for their items to be sold unless they are really good in marketing. Now that everything online can be search, we will be able to see whose price is lower and can still be the same from the one we wanted. It requires big effort to make a sale in retail as there are competitions so the only way for them to earn is to put a mark for their effort and the time their money might sleep in the products that will not be sold fast. 
December 16, 2022, 12:13:23 PM
Because the currency being used is the naira, I initially believed I was in the Nigerian channel. Anyhow, until we have a general survey, we cannot totally assume that retailers outperform the wholesalers in terms of profit. The scenario may only be taking place in your area. Or it could be that it only affects the bread industry in your area, whereas there are different profit margins for the other essential commodities. In the event that there is a lot overpricing of bread in your place, perhaps you can report it to your food department. To my understanding, there is a specific price range, particularly for essential goods.
December 16, 2022, 11:44:44 AM
Well ofcourse especially if retailers managed to buy or hoard a certain item which has huge demand. But that doesn't mean that wholesalers are taking losses; it is just that their profit is lower than the retailers inspite of putting a bigger capital. Their edge is assured and instant profit over retailers who'd spend longer time to 'dispose' of what they are selling in the market.
Government need to step up on this since they are the one who can control the price of each basic necessities and if they cannot stop those greedy businessman then maybe this will be one of the reason the inflation rate rise up.
Yes, I agree with this, because I have experienced something like this in the past, including during the Covid period. Yes, many of them hoard a lot of needs so that it causes the prices of these needs to increase, not only that, even at high prices, I find it very difficult to get them.
Now I think the same thing will happen again where greedy people will take advantage of every available situation for their own benefit and don't care about other people. Things like this must be of particular concern to the government so that the same incident does not happen again, because it is detrimental to many people.
Hoarding, morally, is not a good thing to do. But if it is about business, that's what a typical business minded person would do. Demand is the key and they will take advantage of something and even contribute to it if it would create a bigger demand simply to generate bigger profit. Unfortunately, this is just how businesses work; taking advantage of any opportunity or even create that opportunity regardless if there will be people to negatively be affected of their action.
Government need to step up on this since they are the one who can control the price of each basic necessities and if they cannot stop those greedy businessman then maybe this will be one of the reason the inflation rate rise up.
Now I think the same thing will happen again where greedy people will take advantage of every available situation for their own benefit and don't care about other people. Things like this must be of particular concern to the government so that the same incident does not happen again, because it is detrimental to many people.
December 16, 2022, 11:25:27 AM
I think things that make retailers get greater profit because they can sell directly to the last consumer, this makes them able to raise higher prices than wholesalers, of course this is an effective market strategy for getting big profits.
They can inflate the price and just used the unfortunate incident like covid or any crisis happening in the world so that they can increase the price of the product which is necessary needed at that time. This is totally bad to the economy since this one really affect everyone since this will initiate for the price of other product to rise up to.
Government need to step up on this since they are the one who can control the price of each basic necessities and if they cannot stop those greedy businessman then maybe this will be one of the reason the inflation rate rise up.
The retailers always increase the price of products at their wish leveraging on the circumstances such as covid-19 and the recession that is gripping the whole world.
When the retailers suddenly increase the price of the product, the wholesalers will understand that they are making less again than the retailers they will tend to increase their own price. When this happens it will finally fall back to the final consumer who will have a double increments on the price of products they are getting. That is reason any product you get for $10 today, in few months time you will no longer be able to get that for $10.
Thank my goodness we have bitcoin were one BTC will be equal to 1 BTC and it is resistant to inflation. I pray that the Bitcoin technology dominates the world very soon so that everybody will enjoy the freedom which I think they deserve
December 16, 2022, 10:53:45 AM
Government need to step up on this since they are the one who can control the price of each basic necessities and if they cannot stop those greedy businessman then maybe this will be one of the reason the inflation rate rise up.
Now I think the same thing will happen again where greedy people will take advantage of every available situation for their own benefit and don't care about other people. Things like this must be of particular concern to the government so that the same incident does not happen again, because it is detrimental to many people.
December 16, 2022, 07:01:49 AM
I think things that make retailers get greater profit because they can sell directly to the last consumer, this makes them able to raise higher prices than wholesalers, of course this is an effective market strategy for getting big profits.
They can inflate the price and just used the unfortunate incident like covid or any crisis happening in the world so that they can increase the price of the product which is necessary needed at that time. This is totally bad to the economy since this one really affect everyone since this will initiate for the price of other product to rise up to.
Government need to step up on this since they are the one who can control the price of each basic necessities and if they cannot stop those greedy businessman then maybe this will be one of the reason the inflation rate rise up.
December 16, 2022, 05:50:08 AM
I think things that make retailers get greater profit because they can sell directly to the last consumer, this makes them able to raise higher prices than wholesalers, of course this is an effective market strategy for getting big profits.
December 15, 2022, 12:44:32 PM
That makes sense to me, because wholesalers are supposed to sell for low profit margin but in high quantity so the retailer can resale to the end customer and get their profit too. And we can't compare just with one product as an example this even without how man quantities sold by both parties.
December 15, 2022, 12:20:53 PM
I once ran a business as a retailer. and it is true that a retailer's profit can indeed be greater than that of a wholesaler. However, it should be noted that the retailer's income will always be less than that of the wholesaler. We are retailers buying from wholesalers in bulk. Even though wholesalers don't make much profit, because we as retailers buy in large quantities, wholesalers still get more profits. because the accumulation of profits from the total goods that sell more. we are retail traders selling in retail at a higher price with a higher profit of course. but still a retailer cannot directly sell goods in large quantities. we sell goods one by one. so that even a large profit becomes a small income because the number of goods sold is not as much as the wholesaler. so basically wholesalers have a small profit but the number of goods sold is very large so that the income is greater. while retailers sell goods with large profits but only a few total goods are sold so that income remains small. I left the retail store business that I once ran. because the number of retail traders is increasing. when becoming a trader we must be a minority trader. but known and needed by the majority.
December 15, 2022, 03:34:51 AM
This depends on the situation because I noticed that you are only talking about a single product. For example, whole seller bought a bundle of clothes and then the retailer comes in to buy it, well the whole seller still gets more profit since the retailer can't buy it all as the price would be doubled or more and also with wholesalers their profit are not single penny its big one as those retailers tend to buy more on them which is a guaranteed profit and fewer efforts as they are already known, unlike retailers they need to effort to sell it.
December 13, 2022, 05:03:44 PM
Putting branding and effort into something is what matters the most. You could find a shirt for 9.99 and sell it for 19.99 if you are a retail seller and can actually sell it. Sales is the most important part of every company and it upsets me that most people do not see it.
Your idea, your invention, your website, your product, your machinery, your foods taste, NOTHING matters if you can't sell it. Find a way to send people to mars for 10 bucks per person, if you can't sell it then someone else will steal or buy your product and replicate it and sell it for a billion dollars each. So, it's all about retailers being able to sell a lot better, compared to wholesale.
Your idea, your invention, your website, your product, your machinery, your foods taste, NOTHING matters if you can't sell it. Find a way to send people to mars for 10 bucks per person, if you can't sell it then someone else will steal or buy your product and replicate it and sell it for a billion dollars each. So, it's all about retailers being able to sell a lot better, compared to wholesale.
December 13, 2022, 06:07:34 AM
The difference between wholesalers and retailers is a difference that can be seen immediately. The price offered will also be cheaper than retail sellers. But there is one thing that must be considered, when retailers buy, sometimes buy from wholesalers too, there will be a symbiosis of mutualism that is mutually beneficial to each other. Usually retailers will buy in large quantities so that it is more profitable for the first seller which I then call wholesalers, but those who buy from retailers will definitely not buy the same amount meaning that there will be a longer lag time for retailers to finish their wares.
In calculating the profit calculation it will be very clear that the last seller will benefit more than the first seller.
So what I want to convey here is, the first seller will not get more profit than the last seller, but they can sell more than the last seller. In an economy, I would generally prefer to make a small profit but sell more of my product and be a buyer center retailer, than to make a large profit but have few target customers, or take longer to get my product to market.
In calculating the profit calculation it will be very clear that the last seller will benefit more than the first seller.
So what I want to convey here is, the first seller will not get more profit than the last seller, but they can sell more than the last seller. In an economy, I would generally prefer to make a small profit but sell more of my product and be a buyer center retailer, than to make a large profit but have few target customers, or take longer to get my product to market.
December 13, 2022, 05:00:45 AM
I think important factors that can determine why retailers can get greater profit is to get to know consumers, not everyone likes to buy in large quantities so they buy in small amounts that are affordable for consumers.
You are right when you say knowing customers. Usually, retailers are more exposed from the people, so they can always talk to them and then make friends. That customer will then feel at home or comfortable thinking that the seller looks so friendly so they will come back on that store.What I notice about most wholesalers is that they only do their transactions online or thru call/text. They lack of real life presence with their customers. I think this is one of the reasons why they can attract less customers. Ordinary people buy on retail stores to save but those retail store owners can get their stocks from the wholesalers. Wholesalers are not zero in terms of profit.
December 13, 2022, 02:17:07 AM
The narrative of this topic may mean to some considering business that going into retail can be more profitable for them when compared to Wholesaling just as you have suggested. But for me wholesaling remains the best option because some other factors in business have not been considered and the example you have given to support your claim is not sufficient. Though it may seem that retailers can make more money simply because they can adjust their price for consumers during inflation, wholesalers also adjust their price for retailers so they can still afford the price from the industries/manufacturers. Retailers also increase cost to reflect the cost of transportation of their goods as well. So the profit that you think retailers make may not be so much since there are some cost like transportation that will be subtracted from whatever they make as profit.
I think important factors that can determine why retailers can get greater profit is to get to know consumers, not everyone likes to buy in large quantities so they buy in small amounts that are affordable for consumers.
December 13, 2022, 01:43:18 AM
Retailers or the last seller can certainly interact directly with buyers so that they can get a greater opportunity to sell than wholesale and of course other things are retailers can sell with a small quantity so as to reach everyone so that it makes it easier for anyone to buy.
December 12, 2022, 01:11:32 PM
The same thing is happening here in my country and in many countries as well. Merchants monopolize basic commodities for a period of time, so they disappear from the market and their price rises, then they redistribute them again and sell them at a higher price.
Many people dispensed with many unnecessary goods, but basic commodities such as bread, oil, lentils, chickpeas, and others cannot be dispensed with, so major merchants control their prices.
Is it that as long as you are selling essential commodities, inflation doesn't affects your business instead you make more profit.
Not quite. Here you enter into a semi-vicious circle, because the materials that merchants raise their price as a result of inflation will also have to buy them at a higher price again when the quantity runs out, so practically the real capital value has decreased, because for example the capital that was It equals 100 pieces of the commodity for example before the price has been raised, it will be able to buy only 75 pieces after the price has been raised.
So practically it can be said that inflation is a loss for both the merchant and the buyer.
December 12, 2022, 01:09:12 PM
If retailers are getting the most profits, how then are the wholesalers still in business?
By your calculations, they just might when we look at selling in packs as is customary with wholesalers and selling in bits as it is with wholesalers but the profits is always determined by, how many packs or bits your able to sell and how frequent are you archiving this.
That's the drive for a thriving business and the retailer could be said to be running the show. There are few retailers out there which creates a little bit of monopoly compared to retailers that floods the street and compete largely for customers.
It's just business and they both have there place in the chain chain distribution.
By your calculations, they just might when we look at selling in packs as is customary with wholesalers and selling in bits as it is with wholesalers but the profits is always determined by, how many packs or bits your able to sell and how frequent are you archiving this.
That's the drive for a thriving business and the retailer could be said to be running the show. There are few retailers out there which creates a little bit of monopoly compared to retailers that floods the street and compete largely for customers.
It's just business and they both have there place in the chain chain distribution.
December 12, 2022, 12:08:56 PM
In business,it is normal that wholesalers make more profit than retailers,while manufacturers make more profit than the wholesalers. The wholesaler invest large into his business and gets good profit at the end of his supply. In business,the bigger you invest,the more profit you make but the retailers only have little funds to buy from the wholesaler,the quantity he can avoid and sometimes the retailers run into lost,if the price of goods has increased in the market without their knowledge.
December 12, 2022, 04:06:28 AM
in contrast to retailers who only calculate final sales.
because in the trading dictionary they have counted up to the worst things like their product is defective until it doesn't sell or expires
because in the trading dictionary they have counted up to the worst things like their product is defective until it doesn't sell or expires
Defective product is not only against retailers but whole sellers also have that negative effect . The issue is not only on effect to retailer, a wholesale agent also will have shortage if his manufacturers supply bad product to him so it is the same but the remedy is their is opportunity to return defective product back if it is notice both retailer or wholesalers through the chain that is supplies. Know it that retailer making profit is same as for wholesaler making profit because it is increase in selling of the goods.
Jump to: