Topic: Retailers make more profit than wholesalers during inflation. (Read 946 times)

Retailers could really just easily adjust basing up on what they had purchased on those wholesalers and its true that the burden would really be passed up to us consumers on which leaving no choice but to deal
up with those mark up prices.If we do speak about retailers making more money or profit then its none of wholesalers business.We do have our own way on setting up prices and if those retailers do really
make some slight higher in profit margin then it is of course depending into their own preference and consideration. People or consumers are the ones who would really be having to look
which one would really be cheaper in between retailers.

If the wholesalers increase their prices, then so do the retailers. The consumers always pay elevated prices for goods so it isn't the retailers that are necessarily effected.

If sales volume decreases as a result of inflation because consumers are unwilling to pay the higher prices, then that's a different story. Most of the inflation you're seeing now is money printing. Demand was artificially increased because of how much money was circulating in the economy so both wholesalers and retailers raised their prices once they couldn't meet demand.

The biggest victims are the unemployed and the urban residents who rely on the urban subsistence allowances to make ends meet.

The rich use the large amount of funds in their hands to purchase value-preserving and value-added commodities, obtain high value-added profits from them, and become richer.


Issuing a large amount of currency and creating inflation is the most convenient way for the country to plunder social wealth.

I know how large retail works - for many years I worked with retail, grocery, non-grocery. I know how a commodity matrix and planning of deliveries/purchases, including perishable goods, is formed in a grocery store. Yes, that's right, you described everything correctly. But I specifically specified that large batches of perishable products are not purchased by small private shops, which also do not have large contracts and conditions like grocery chains.

i agree what you have mentioned  - here in our region the demand has reduced a lot.
And because of this -  the retailer and supplier both are in trouble! I too have stopped going to the market and other people too have stopped purchasing unnecessary stuff.

It's impossible to make such a wide and sweeping statement across all products, at least without evidence, because there are so many factors involved. We are currently in a time of massive inflation which is eating into the profit margins of producers, wholesalers and retailers. Ultimately it is producers and retailers who in most cases control the profit margins at all times because wholesalers are simply middle men who try to make money by buying in bulk amounts from suppliers. The overall state of the economy also plays a big factor because in recessions when times are tight then wholesalers often struggle to shift much stock and can be on the hook for inventory while retailers are ruthless in their pricing offer.

Sort of correction, they do buy perishable food in bulk, but they do not buy it right away, they just get the order in early. This means lets assume there are 100 farms that grow tomatoes, and this big grocery store like Walmart makes a deal with all 100 and tell them to give the store 10 kilograms per day for example, I am just giving an example, they pay beforehand, and they buy the rights to whatever grows and that way they do not get the food in a single day, but they get it 365 days constantly.

That's how it works, I worked in a huge grocery store chains office for a while, and that is how they did it for every product, they made contracts for bulk but they got the items piece by piece.

The effect of the buyer is actually not on the small amount of mate, but on the lower price. Because when the price of goods can be sold at the cheapest figure, it is certain that many buyers will approach and want to buy in large quantities. Especially if the goods purchased can be stored for a long time before being consumed or used.

And if you personally prefer to buy at a retail price for your daily needs, if you calculate it on a weekly or monthly basis, it will also be more expensive than those who buy wholesale. So it's impossible for everyone to dislike buying wholesale as long as the price can be cheaper than diluted which can be used in a day and can run out immediately, so you have to continue to provide time and money to buy the same items every day.

I think a strategy that can make a retailer profitable is that he can sell in small quantities so that consumers can buy it, by retailing a lot of people can buy it and it's different from wholesalers who usually don't like people because they don't want a lot of stock, and I also prefer to buy retail for example daily needs rather than storing or being in stock.

I'll tell you the words of one of my friends
"If I sell 10 kilograms of nails, I will get some profit. Let it be $ 100 per batch. And I will have this profit quickly enough. But if I sell these 10 kilograms of nails by the piece, I will earn much more, but more slowly. I am nowhere I'm in no hurry

The only caveat is that this applies to goods of constant demand and with a long shelf life. That is why, for example, private grocery stores never buy a lot of perishable food.

I noticed another phenomena in my country when it comes to large producers trying to push prices up without any boundaries. The large supermarket chains started to not give into the demands from the producers to increase the prices for consumers. For a few weeks we had no Coca Cola and other big brand names in the super market anymore. Which was a bit funny because I always thought that the big corporations had all the power, but it turns out that supermarkets that get the actual money from the consumers holds the real power. This is a quite interesting developed because at the same time the supermarket chains is increasing their own low budget brands into a lot of new segments and will happily take away the market share from the products that are not being offered anymore. So for consumers trying to save some money the only real chance was to go for the own no brand products from the supermarket. It seems that the retailers that are closest to the consumers are the ones that can decide on the prices for the consumer to pay the most, they hold all the power now.

Not only when there is inflation, retailers will always get bigger profits than wholesalers, but what needs to be understood is that wholesalers calculate profits not from one product but as a whole, so that when combined they will also get big profits. Meanwhile, retailers gain by selling one product at a time, the pattern is the same but the profits are different.

In trade law, this method applies, meaning that wholesalers seek profit from the entire product, while retailers do use this method in seeking profit. For me it's not surprising that this happens and applies because that's the process.

The things depend on the location of the shop - sometime the wholesalers have limited clients they sell in bulk
while the other things sold alone has different profit margin - correct that the retailer make more profit than the whole seller.

We will see things like this from time to time where the retailer will get a bigger profit than the wholesaler or whatever it's called. This is a form of business that is carried out, the farther the goods sold by the factory (change hands), the more valuable the merchandise will be. For example, factory A produces bread and they sell it for say $2 to the first person, the first person will sell more than $2 to the third person, and so on.

so true. Because even though the profits that wholesalers get are a little from each type of product they sell. but their sales are so fast. because retailers always buy a lot at one time purchasing to wholesalers. so small wholesale profits will become large if accumulated over time. because the total goods sold by wholesalers are many times more and faster than retail sales which take longer. and sell in small quantities little by little. and well both are mutually beneficial between retailer and wholesaler. both of them need each other.

This has been happening for a long time. Even in my country, they are charging $10 for a product that was only $7/6 a few months ago. And don't even ask about gas price, man. This is all a mess now. 
Here we are making our own food (it's an agricultural country). Yet the government is exporting those to other country and earning money while we still have to pay the higher price to get food.
And those who know that people will buy from them no matter what, they tend to take more advantage. I think it's the problem with the people. They still pay the higher price, hence they are able to sell.
Here's a funny story. In my country, egg's price rise up suddenly and people were furious. So they stop buying eggs for 7 days. Then the price dropped even less than before.

Retailers could sell their products at higher prices compared to wholesalers but that doesn't mean that they are making bigger profits. Their expenses and capital are different as well as their manpower. Wholesalers who are selling their products at cheaper prices could also gain a bigger profit when they're able to sell out bulk orders. Rich gets richer and poor gets poorer isn't always applicable in business when it comes to wholesalers and retailers because they aren't competitors but rather they make the complete flow of the business.

I think the closure of the bakery is not entirely due to rising flour prices, this could just be a marketing strategy to attract people to buy more even though the price is rising, they stop producing bread to make people who are already dependent on their product feel that bread it is rare and very hard to get when manufacturers see very high market demand for their products after production stops after the market feels uneasy because there are no goods is the right time for producers to restart production and increase prices, of course, this is also in realized by the retailers because they are dealing directly with consumers, considering that bread is very rare and many consumers want the bread so that retailers have the opportunity to raise market prices according to their wishes and it is the right time for them to raise prices to take more profit high.

From the unit price, retailers will indeed be more profitable, but those who benefit the most are those with a faster turnover of money, even though they only take a small portion of the market price.

In my opinion, it is normal for retailers to get a larger profit margin than wholesalers, but in general, wholesalers, of course, get a lot of profit accumulatively, and I think this is in accordance with the law of the market that those who are close to the final buyer can sell at a higher price. expensive.

The worst example of this is renting. While inflation may go super high, you can't increase the rent price by law inside the year, so basically we are talking about something that would cause you to lose money over course of a year, and then you can't increase it as much as the inflation, but what the law allows you to. Did you know that there are people who are living in great big apartments in the middle of New York for just a few thousand dollars, when the real value could be as high as 10+ thousand per month.

This is an example from there, it happens in my nation too. Renters are protected by law, but then how could landloards even survive? Why is it ok for you to sell a shoe for higher and higher price, but landlords are exempt from increasing the rent?

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.

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.

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. 

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.
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.

In a country where the economics of the economy is not regulated, in a country where extortion is a normal act, in a country where agencies which are assigned to monitor trade and standardization does not work, either they are being soaked in corruption and bribery, that is the resultant effects.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.


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.

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.

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.

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.

In this case, at a glance, we see that retailers are more profitable than wholesalers, but in reality, wholesalers earn more profit than retailers
where wholesale providers must have calculated their initial capital in doing business, 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

in these inflation times, many people prefer retail over wholesale. because the price is relatively cheap and affordable by the community.

However, I think retail and wholesale profits are the same. it's just that retail has more buyers.

That is the reality,companies use the inflation as excuse to hike the price of goods and services. This happens especially in countries where there are no authority to regulate the buying and selling of goods. The companies take this advantage and rip the final consumers.

Op, you made a very nice analysis and to your environment and according to the factors in your calculation you are correct but you did not remember that wholesalers sell in bulk while retailers sell in ones. Don't undermine the profit in and mass sells.

If they label it as fresh meat and the only trick they apply to it is the ice sheet inside the package you can avoid that easily, I haven't seen in my life anybody doing a perfect cover, it will have at least some tiny white circles if that happens, well that meat is at least 1 year old and it has spent at least 3/4 of that in the freezer. If the dots are bigger than 2 cm, then it's 3 years. I advise everyone to not buy frozen meat, it's not worth it even looking at the price, the taste is not the same anyway even if they are both fresh and the risks are just too big, even unintentionally you have a malfunctioning freezer that can't keep the temperature and in one week after 7 cycles of frost defrost that's dog food.

But the things where you can't avoid it as a recycled ingredient are the salami and baloney, I haven't bought those from a market in years and I don't plan on.


There is no rule for any of them to make more than the others, it depends a lot on what you're selling, where you're selling, and from the start the margin rates of everyone. For raw food like fresh meat, everyone makes nearly the same, for exotic food imports the supplier of those will make more than everyone as he is the one at risk of ending with unsold expensive merchandise. The reseller of fish products will make a few pennies in Calais and a fortune per kilo sold in Wien, if we go into beverages, I can tell you for sure you can get the 2.5L bottle at 1.10 Euros directly from the producer while it can peak to 3.5 Euros on highway 24/7 shops.

It's not a rule for anything, producers can be forced to sell at a loss so they will lose 100 euros per ton instead of it rotting away and losing 300 euros, a wholesaler can end up with stocks and they will do the same, retailers might end with it rotting and nowhere to go even for half a price and take the loss also.
If things will be that simple Europe wouldn't be throwing away 150 million tons of food (officially) as I think the numbers are actually double.

Its always been like this and as a consumer then there's nothing we can do but to deal with those high prices if there's nowhere you could eventually go.If the herd or the community would be sticking out on a said retailers or even going into those wholesalers then for sure they cant really still avoid those high prices.There might be differences but we know that wholesalers cant really just provide out on small quantity incase you would be buying up something.Speaking about profitability in between these two wont really be that such a high issue or something that we could talk on.They are making money no matter what angle they would
make.Its up into some system or ways on how they would really be playing out those prices whether it is really just right or too much, there's nothing we can do.

Companies will always try to pass additional costs to the end consumer, this is just how it is, however I agree with you that with the excuse of the high inflation some businesses are raising their prices even more than what it is necessary to cover their additional costs, but there is nothing we can do, and if governments try to solve this then they will just make it worse as they always do, so the only thing we can do as customers is to identify the businesses which are employing those tactics and then never buy from them ever again.

I disagree with you OP, because if wholesalers buy goods from the manufacturers in this inflation season, he or she will do some calculation to know how to sell the goods to retailers to make a suitable profits from the business.   Let me use this chain of distribution to show you how manufacturer and wholesalers earn well more than retailers, manufacturers will sell to wholesalers to make a good profits, and wholesalers will also sell to retailers to make a good profits , but retailers will sell to final consumer to make a little profits from their business.

I see that you gave the analysis based on mathematical tools but it doesn't work in economics tools of analysis. There is no way a retailer makes profit more than a manufacturer and a wholesaler. A retailer always sells his or her goods based on the expenses done after purchasing the commodity. Like if a manufacturer sells bread to a wholesaler at the rate of $400 and the wholesaler also sell it at the rate of $410  to a retailer based on his or her expenses the retailer might finally sell it to the consumer at the rate of $600. The wholesaler still make more profit. Because the wholesaler bought it in a large quantities and sell it to different retailers while retailers bought it in a small quantities and remember the consumers are more than the total number of breads the retailer bought, so the profit is always shared between the manufacturer and the wholesaler although the retailer also make profit but can not compared to the wholesaler's profit.
But the consumers suffered the highest inflation in the world.

I understand. It may be true but the retail seller here around me is still having troubles with their sales. The reason is the competition.
People will find a way to buy cheaper necessities and they will ask every retail shop about their prices so they could compare it to the nearest they have.
Stocks are also going down and it became a big problem for every retail shop. Their businesses are also in the brink of closing down because they cannot sell anything anymore and ordering it from far wholesalers will mean paying more.
Unless a consumer is forced to buy at a retail shop even at a high price there won't be sales.

I own a retail store, and it's not like that in reality. I did increase the price of some goods because the prices of middlemen increased, it didn't mean I was taking advantage of this moment for a fleeting profit. However I think of consistent profits, at least maintaining the number of requests by adjusting prices that do not make my customers run to other stores.

Let's picture it from the two ends and compare them together, wholesalers don't need to struggle before they make their sales, all they need is a warehouse and a huge capital, their target on profits is little amount but sinfe they deal with quantity then each item been sold will accumulate a good amount for profit realization, as for retailers, they buy little in quantity and have a direct sale with the consumers, this makes them have chances of manipulating price by hiking some, they also suffer the losses of damage and poor market sales whenever their inflation, this same inflation can favour them and also at the other end discomfort them in many ways, but i will also prefer wholesaling than retailing.

the reason may be according to their individual needs and do not want to buy goods in large quantities because every consumer of course buys only when they need it.  in contrast to wholesalers who can stockpile goods in large quantities with cheaper purchases even though the profits are small but can attract customers to be able to take goods from them.  but when there is inflation, of course, not only in one item such as the raw material for bread flour mentioned by Op, but there is an increase in several other types of goods and of course wholesalers know in advance than retailers.  This situation will be exploited by retailers by looking for a larger profit percentage

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 only know that a good part of the meat that should be destroyed comes to my country and the surrounding countries through various legal (but also illegal) channels and is then sold as fresh meat mainly in various retail chains. So instead of paying for the safe destruction of food (which is expensive), some even manage to sell the meat and make money, but some would just say "what's new in the Balkans" - everything and everyone has its price and every product has its buyer.

Most people consider inflation as a negative phenomenon, but some people welcome it with open arms, because it is a time for extra profit for those who know how to use it.

I think it’s not calculated properly. Retailer would not increase the prices just out of thin air man! The price circulation is process from raw materials to finished products. Retailer would increase the price if let’s say wholesaler increases the prices, transport of material gets increased or may be packaging costs are higher and much more accountable stuff which gives final price. Even this is true from the very basic that’s raw material of making bread which might cost higher then this is directly felt by end user since middle chain will increase the marginal % that they are getting incurred by previous party. Retailer Will be in loss if they increase the prices but customer sees that wholesale market delivers at lower rates then they would rush there!!

Simple math like this never works in real life.
You're simply thinking of this sells for that, that for this and you make it sound like both have the same costs and nobody is counting any losses.

I'll give you a few examples of why we've stopped selling as a retailer of meat and stuck to supplying a few large superstore chains.
First, you will need a space to self that, the more traffic the higher the rent, you need an employee, you need a lot of legal stuff, you need to take care of a lot of regulations for being a food retailer, and you need to be careful of inspections, you need to worry about your employee not to make mistakes or "mistakes" and more important than everything, you need to really balance the stuff you are selling, because you can end u with unsold stuff that is just going to end up ...nope, not the trash can, here you need to pay for wasted food disposal.


Let's assume just for fun that one of those goes to waste, he bought 6 for 450, and he only sells 5 for 500, from the 33% profit you're down to 10%, and this is not really overall profit as you haven't included the cost. The producer doesn't have this problem, he knows in advance because of long contracts what he has to produce each day and who is going to buy, the retailer has to deal every day with up and downwards demand and take the risks.

I disagree with your point of opinion, the wholesalers still make more profits than the retailer because they sell bulk quantity and also they can simply run their system with less expenses while the retailers has more extra expenses like electricity,rent, salary and interest for their loan since we call them as small business so obviously I conclude that they are running their business with loan money which is generally has high interest rates than for the bog business.

This happen because it is more convenient for a person to buy in small number than in bulk, last year I want to buy goods in bulk since I will get more discount for it and I will have stock in my house but then inflation happen, I am not buying goods for pcs I know that merchant is actually getting more money in small orders but then I can't afford to buy many pieces right now because the price is higher than my budget. I doubt that normal  people in my country  can afford to buy bulk as well, I mean those normal wage earner those that are not poor nor rich.

On a turn over base the wholesaler makes the more profit than the retailer because he sales not only for the retailer but for many retailer that queue up to the goods. He is having chains of people coming but the retailer is not that way. The patronage is not much but individual number is small comparing to number that wholesaler have and that is meaning greater chance of profit also.

During inflation? Err.. retailers make more than wholesalers all the time. The business of wholesalers is selling in bulk and making their money through shifting stock at a large scale. In fact it is always a tug of war, where retailers are usually able to apply more pressure to wholesalers, in the form of demanding better pricing, because they actually call the shots in this business relationship. Wholesalers often cannot replace their customers easily and will usually accept lower margins to keep business going. For wholesalers they simply have to pass the pressure on to their suppliers or lose a proportion of their revenue. None of this is new and doesn't change much during recession type circumstances.

It’s true situation at all the time,the retailer will face the people on the close end.So they can sell at any price they want.They can sell at any price or with any percentage of profit even a 300 percentage of price above the real price.The whole sale guy will gain profit immediately with less effort,but the retailer will hold the product and make the people to come and buy and earn huge from it.

Despite the fact that we all know that there is inflation, the OP meant that retailers make more profits than wholesalers simply because they sell to final consumers after purchasing goods from wholesalers.
The problem is that they put a high profit margin on their goods because of inflation, even if they keep the goods in their store before the price increase; most of those retailers make more profit than wholesalers who sell to them in bulk.

Simple reason is that the people don't have enough money to buy wholesale due to the rising prices, hence the ones who can are presented with an opportunity to sell the goods with a slightly higher markup to allow other people to buy it in bits and pieces. Also, the wholesalers have no other choice but to keep their markups at the minimum to still make a sale and may even result to them closing shops or slowing down their restocking since not a lot is buying anyway. It's a chain reaction that is not pretty to look at.

Inflation times are the only one way opportunity retailers, brokers ans and middle men takes advantage of market price knowing that supply is low and demand is high, but it's actually a factor that brings more detriments to the economy of market orice and it stability sinfe whenever they inflated a price, the deflation of the same commodity price becomes difficult to be achieved since individuals have control over the current market price value they offer for an item, it's a thing of desire and satisfaction of needs, if the price offered is favourable or not the constant thing is that there will always be a demand, but it's killing the economy on a long run effect on price stability.

Transportation has often been touted as the most expensive charge in many economies and it looks like it could be the same here (perhaps that and the processing of the flour). Those two are technically owned by those who have made the biggest investment (vehicles and machinary) in order to produce the flour and deliver it so I think it makes sense they're first to put up their prices from inflation (it might not be or seem fair though).

Retailers are more harder to sell their products if they're looking for huge margin, while wholesalers they're sell their products much cheaper with bigger quantity which mean there's a big cash circulation. Retailers will buy the product from the wholesalers and there's no guarantee many customers will buy from the retailers. During the inflation either wholesalers and retailers just increase their price, so there's no reason if retailers is better than wholesalers.

Well, that's the time they can take advantage of using inflation as part of their business. Supplies are getting more expensive and at the same time, they can put more for their mark up prices.

Just look at these oil companies, the OPEC has cut the supply while their retailers are going to take advantage of it despite having the supply on their tankers that has been there even before the price increase and the increased of inflation rate.

Well, they've been in the business for so long and they know how to play this game and they don't care that the consumers, us, are the ones sufferring a lot.

I feel like companies are using the rising inflation as an excuse to increase prices more than necessary and making things worse. Especially companies that sell essential commodities are aware that consumers can't stay away and have to keep buying no matter what the prices. The politicians keep talking about economy downturns and that things will get worse, yet many companies have strong revenues and pay their employees big bonuses. I wish the government would keep an closer eye that companies don't increase their prices too quickly. Every price raise that is not necessary except to make higher profits will increase the inflation even more. Once the overall inflation is above 10%, the government should step in. Otherwise we face the risk of a downward spiral.

I don't know how did you come up with this conclusion. You should find and post some valid and accurate statistical data to backup your theory. Using one bakery shop as an example isn't enough.
The rich don't always buy from wholesalers. The rich are rich because they have big income and lots of assets, not because they are buying from wholesalers instead of retailers. The retail shop owners have costs and their costs are increasing during times of high inflation. The same thing applies to the manufacturers and the wholesalers.
The retail shop owners usually increase the prices as the last resort. They don't want to increase the prices, because the retail industry is so competitive. Maybe the bakery shop in your area doesn't have any competitors, so the owner wants to take advantage of his "monopoly".

My view, Perhaps a lot could happen under such conditions and there is no doubt that retailers and wholesalers make more profit, but the question remains where the money is made. The price of goods and assets is determined by the value that sellers receive for their goods and assets. The only way for sellers to receive more than what they get for the goods and assets they sell is if the goods increase in value.

Your analysis might be correct from some perspectives. But during inflation, the currency loses value and there is an increase in the price of goods and services. This would definitely lead to an increase in the cost of production. What the manufacturer simply does is increase the price of the goods and the wholesaler would push this extra cost to the retailer and finally, the consumers pay for all the extra cost. There might be some benefits of buying in bulk but the difference is sometimes not significant. Also buying in bulk also depends on your family size, house space, and electricity supply. It is also important to note that there are some essential goods that you cannot buy in large quantity because they are perishable or easily expires. Generally, inflation doesn't have any positive effect on any of the actors in the chain of distribution except the prices of goods and services are not adequately regulated and controlled by government agencies.  

 
You just calculated only the selling price of the bread. You didn't consider that the value of the currency has been reduced because inflation reduces the buying power of people. Also, the wholesaler incurs other costs like transportation, shop rent, etc, that would have also increased. Yes, the wholesaler is making a profit but inflation has the tendency of making it lose value. Inflation affects all businesses regardless of the goods they sell because they have to buy raw materials and pay for other services.

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The sizes of your pictures are too large. I think it would look better if you reduce them. You can consider reducing their size using this  

Do you think reduction in calculation of the wholesaler profit down to 12% is correct ? He also have increase in price after reopening the bakery, so if there is an increase his profit should increase also. It won't drop from 14% to 12% because his price didn't drop.

Price increase is what every business benefit from. It is a circle but maybe the retailer can benefit more for selling each one but to compare the turn over, the wholesale has more profit and advantage to sell more and have more return. And bread perish more in the store of a retailer than a bulk/wholesaler store. You also need to calculate the amount of bread that likely to perish in the retailer shop and remove it from the profit expectation.


What I see is during inflation and the increase in price that the percentage of increase result in more profit than what it is before the inflation and this is why it is inflation. When price change profit increase and the money lose value to the ability to buy more product. It move from one store to another, one commodity to another like a circle, you gain profit while you are selling your commodity in your store but you also can't purchase with at old price of the goods or commodity you need so you add more money to do that. That is how inflation is. It affect the business because you need more capital or money to restock your goods/commodities when they finish. The market price won't remain the same in inflation and it affect the economy.

There is a say that 'the rich gets richer and the poor gets poorer'. Retailers are making more profit than the wholesalers and manufacturer during inflation. The poor always buy from retailers because they are the final consumers, while the rich buys in bulk this means they buy directly from the wholesalers. Last week the bakery in my area closed down,due to inflation in flour price,thinking this will be the solution. There was no bread for three days. After three days,the bakery opened and everybody was happy but this time,the bread price increased with 40 naira. A pack of 6 was sold at 410 naira wholesale price,80 naira for one retail price.This shows that the retailer gets 70 naira profit after selling a pack of 6 which is 480 naira. When the bakery reopened a pack of 6 is sold at 450 naira to the retailer, the retailer now sells 100 per one,i.e 600 for the pack.The wholesaler buys from the bakery at the rate of 360 naira for a pack before shutdown and sells 410 naira, after re-open he buys at 400 to sell at 450 naira.
 

 From calculation we can see that before the bakery shuts down,the wholesaler was making a profit of 14% but after the bakery reopened he makes a profit of 12%. The retailer was making a profit of 17% before shut down but after the bakery reopened, he makes a profit of 33% which is almost double of his profit.
 Is it that as long as you are selling essential commodities, inflation doesn't affects your business instead you make more profit.