In the world of commerce, wholesalers play a vital role that cannot be ignored in the process of distributing products. Companies that work as wholesalers are the cornerstone of facilitating the movement of goods from manufacturers to stores or end customers, which contributes to getting products to markets faster and more efficiently. But what is the importance of these distributors and what role do they play specifically? In this article, we will review together how wholesalers affect facilitating supply chains and how they form an essential part of the distribution network.

Wholesale distribution meaning

It is the process of purchasing products in large quantities from manufacturers or suppliers and then reselling them in smaller quantities to retailers or other companies.

The goal of this process is to facilitate the transfer of products from source to market more efficiently, which contributes to reducing costs and increasing access to target groups.

The main benefit of wholesale distribution is that wholesalers obtain goods at lower prices thanks to the large quantities they purchase, which allows them to sell these products at competitive prices to retailers or other companies.

Characteristics of wholesalers

Wholesalers have a number of characteristics that distinguish them in the distribution process and help achieve efficiency in the markets. Here are the most prominent of these characteristics:

• Buying in large quantities: Wholesalers purchase products in large quantities from manufacturers or suppliers, which allows them to negotiate lower prices due to the large purchase volume.
• Selling in smaller quantities: Despite purchasing large quantities, wholesalers resell products in smaller quantities to retailers or other companies, which facilitates the access of products to local markets.
• Storage and distribution: They also have extensive storage facilities to store products before distributing them, which helps ensure that products are available in markets at the right times.
• Trading with retailers only: They usually sell their products to retailers or other companies instead of selling them directly to end consumers.
• Diversity in products: Wholesalers deal with a variety of products across different sectors, making them an important source for a wide range of goods.
• Financing: They buy in large quantities and bear the costs of shipping and storage, which enhances their role in securing the flow of products through different channels.
• Long-term business relationships: Wholesalers have stable and long-term business relationships with suppliers and retailers, which contributes to the stability of distribution operations.

Importance of wholesalers

The importance of wholesalers is great in the supply and distribution chain, as they play a key role in facilitating the movement of products from manufacturers to markets. Here are the most important points that highlight the importance of their role:

Reducing costs

Thanks to their ability to purchase large quantities of products, and thus obtain better prices from suppliers, which contributes to reducing the overall costs of distribution.

Facilitating access to the market

Wholesalers help expand access to products in different markets, as they sell products to retailers or other companies that have the ability to deliver goods to end consumers.

Storage and inventory management

Wholesalers are responsible for storing products and organizing inventory, which reduces the burden on manufacturers and retailers.

They also contribute to facilitating the movement of goods and ensuring their availability when markets need them.

Flexibility in dealing with orders

By distributing products in smaller quantities, these entities help meet the needs of retailers and companies with diverse demands, ensuring the continued availability of goods.

Enhancing B2B Trade

Wholesalers facilitate trade between different companies by acting as intermediaries in buying and selling, as they are connected to a wide network of suppliers and retailers.

Innovation and Product Expansion

Through their deep knowledge of the markets, wholesalers help in introducing new products and innovative technologies, which contributes to meeting the needs of diverse markets.

Wholesale distribution example

Here is a wholesale distribution example that illustrates how wholesalers facilitate the process of accessing products in the markets:

• A garment factory produces ready-made garments in a variety of colors and sizes. Instead of selling these garments directly to consumers, the factory partners with a wholesale distributor.
• This distributor purchases large quantities of garments from the factory and stores them in its warehouses.
• The distributor then sells these garments to retailers, such as large clothing stores or small shops, in smaller quantities and at reasonable prices.
• Instead of each retailer dealing directly with the factory, the distributor becomes the link between producers and retailers.

Examples of wholesalers in the Middle East

In the Middle East, there are several companies that act as wholesalers and contribute to the distribution of products across different industries. The most prominent examples are:

• Al Harithy Company (Saudi Arabia) – distributes food and beverages in bulk.
• Abu Dhabi Distribution Company (UAE) – distributes water and electricity.
• Al Futtaim Group (UAE) – distributor of many products such as cars and electronics.
• Al-Faisaliah Group (Saudi Arabia) – Distributes food, health and beauty products.

Best wholesale distribution companies in the Middle East

Cross Arabia is one of the leading distribution services companies in the Middle East. With years of experience and innovation, the company has a strong reputation for providing comprehensive and efficient distribution solutions across the region’s markets.

Cross Arabia offers its distinguished services to retailers, large corporations and manufacturers alike, with a focus on achieving efficiency in moving products across different channels.

The company has proven its ability to manage distribution operations across a wide range of industries, including food. This makes it the first choice for many companies seeking to expand their product reach in the Middle East.

FAQs

What is the role of a wholesaler in a marketing channel?

A wholesaler buys products in bulk from manufacturers and sells them to retailers or other businesses, acting as an intermediary in the marketing channel to ensure efficient distribution.

What is the position of a wholesaler in the channel of distribution?

A wholesaler typically occupies a middle position in the distribution channel, between the manufacturer and the retailer, facilitating the movement of goods.

Is a wholesaler a distribution channel?

Yes, a wholesaler is part of the distribution channel, but it is one component, as the channel may also include other intermediaries such as retailers and distributors.