What is the future of Wholesale?

By Benjamin Rüggeberg
March 19, 2021

In times of marketplaces, classic wholesale is in a state of flux. Today, as a distributor or trade agent, you have to look for new ways to find trending products that are suitable for wholesale order. This is because many manufacturers now supply their customer, their buyer, directly, even across national borders. The Internet and new sales channels in the form of online stores and marketplaces are making this possible. 
So, where are the wholesales of the future? You will find out in this article

What is the definition of wholesale?

The term wholesale is over 200 years old and was derived from the French term "marchant grossier". Here, the original term does not refer to something large but to the quantity dozen ("Gros"). This brings quantity into play because a wholesaler buys and sells large quantities.

The wholesaler is the link between the manufacturer and the retailer and plays an important role in the distribution of produced goods. 

For example, a manufacturer in South Africa produces 5000 picture frames from recycled wood per month. The manufacturer sells about 500 products in the local market. 4500 picture frames go to wholesalers and are exported to Europe, among other places, and distributed to retailers, who then sell the picture frames to end customers or consumers.

What is the difference between DTC and B2C?

DTC (or D2C) is the abbreviation for Direct-to-Consumer, whilst the term B2C is the abbreviation for Business-to-Consumer. Same thing? Not quite. 

Using the term B2C generally implies that it has been preceded by B2B (Business-to-Business). A typical example would be when the manufacturer of a product sells to a distributor (B2B) who sells on to the retailer (B2B) who sells on to the consumer (B2C).

D2C on the other hand is just what the abbreviation describes: direct to the consumer, ie. directly from the manufacturer to the consumer thereby cutting out any form of middleman. The manufacturer takes on the role of wholesaler and distributes the manufactured quantities to the customers in many individual orders and smaller quantities. Online shops, marketplaces, favourable transport rates and targeted advertising opportunities make this possible.

In this direct trading relationship between manufacturer and end customer there is no place for the classic wholesaler. The manufacturer needs direct contact with the customer in order to receive feedback on its products, to convey the brand message, and to be able to offer products at favourable prices.

Read below how a wholesaler can play a role in a direct-to-consumer strategy.

How is wholesale changing with direct sales?

Well, times are changing. While digitisation is advancing and classic business models can be found in between lines of code, many wholesalers do not find themselves in it. Today, it is easy for manufacturers to operate their own online store and supply customers all over the world with a D2C strategy, or to attract retail via a B2B marketplace or B2B online shop. Classical wholesalers usually don't find a place there, despite one of their strengths being an important part of the logistics and their influence on the production to adapt products to the local market.

And while on the one hand the classic wholesale trade is disappearing, some manufacturers are explicitly looking for this distribution channel. Thus, more than before, it is up to the wholesalers themselves to find products for their portfolio.

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What are the opportunities for wholesalers?

While more and more manufacturers are pursuing a DTC strategy, physical trade shows are becoming more and more redundant as a place to exhibit and promote novelties and innovations. The Corona Pandemic and the cancellation of thousands of trade shows as accelerated this trend.

Marketplaces are an alternative to discover products for the wholesale trade. However, a common wholesale marketplace only offers a trading relationship between exhibitor and retailer or exhibitor and consumer. There is often no place for wholesale business. An exception is MTMfair, where wholesale of sustainable products in the sector of interior design, home décor, lifestyle and non-food in general can be found. Here the trade chain is reflected digitally from the manufacturer to the wholesaler to the trade agent to the retailer or interior designer all the way to the consumer.

Some of the benefits of working with distributors or wholesalers is being able to tap in to their existing and local storage capacities which result in shorter delivery times for the retailer. One can also be sure that products can be combined with others and arrive intact and on time, usually without the hassle of import regulations as the wholesaler is already in the retailer’s economic zone. Also, as a retailer, you also have a local and influential contact person who can improve product quality through short distances to the manufacturer.

Today’s wholesaler can offer more service to the manufacturer, stock the manufacturer’s products in the local customer market and deliver them from there. 

But how does a manufacturer go about finding the right distributor or wholesaler for their product? With marketplaces like MTMfair, manufacturers can explicitly search for distributors or sales agents without having to wait until the wholesaler comes to them. Vice versa, at MTMfair distributors and sales agent can find manufacturers whose sustainable products complement their existing portfolio.

How do you start wholesale today?

As described, times are not getting easier for traditional wholesalers - rather the opposite. The challenges today are different. Internet affinity is one of them, as is the willingness to distance oneself from the classic distribution business.

Wholesale of the future will take place in direct DTC or B2C and from manufacturer to retail (B2B), with the manufacturer itself marketing and selling its products.

There are marketplaces that support both the one and the other form and where wholesalers are welcome. One such marketplace is MTMfair. As companies grow on MTMfair with international business, a company may come to the point where it could use support from a distributor. MTMfair allows you to search for distributors for individual countries, as well as find products that complement the range. In any case, you need a website for your business as a wholesaler in any industry, set up your own store and should take customer service further. Becoming the sales representative for a manufacturer isn't an easy task, but platforms like MTMfair can really help. it's also easy to reach out and connect with a matching retail store.

The engineers at MTMfair placed an explicit emphasis on creating an active and multifaceted account for wholesalers on the platform. It is our belief that the integration of distributors and sales agents can be of immense help in the trade chain, from the perspective of both the manufacturer and the retailer.

We warmly welcome those distributors, wholesalers and trade agents whose portfolio includes products of an ethical and sustainable nature to create your account today.