stephen mills

Dsintermediation of wholesalers and retailers

For well over 100 yearsThe wholesale industry has served an important role in the distribution process.  But is this relationship about to end.

Wholesalers selling retail or retailers selling wholesale As with most wholesalers they will sell to retailers, market stall holders, car booters and even ebay sellers. Some are dipping their toes into the dropshipping market. But now a disturbing new trend is taking place which is quite scary to small shop keepers like myself.

I am the owner of a children's formalwear shop on the high street. Recently we have branched our business online but have discovered it seems many of our wholesalers are turning retailers and offering goods directly to the public at slightly above wholesale prices in direct competition with ourselves.

The wholesaler that we buy our main stock of boys suits from has a minimum spend of £100 in store. This keeps the general public at bay who are looking to buy a single outfit.But they now also sell the same items on the internet at wholesale price to the general public but with no minimum purchase. This means that Hilda from down the street can buy an outfit online for almost the same price I am having to pay for it.

I was so angry about being undercut by my supplier that I contacted the manufacturer of the boys suits, only to find out they too were selling directly to the public on the internet although at the RRP. High street retailers are having a hard time as it is without having to compete with our own suppliers.

On the other hand on same high street as our own shop small n smart, we have retailers offering goods at wholesale prices direct to the public. This of course is just marketing spin, the prices may be lower but I have yet to get a genuine wholesale price from a retail shop.

Is Tesco a wholesaler or retailer. Their prices are often cheaper than wholesalers in fact lots of corner shops preferred to buy all their consumables form this store, yet no one would ever think of Tesco as anything other than a retailer.

I can understand the pressure put on wholesalers by office supply superstores, multiplex retailers and warehouse home centers and disintermediation of wholesalers through electronic commerce. But the fact remains Wholesalers are the intermediaries in the chain between the manufacturer and the customer. Unlike the retailers which are the last link before it reaches the end-user.

It seems the line between wholesaler and retailer seems to be getting a little blurred.

I have decided to started a petition with no 10 to regulate the industry which I hope you will all sign.

The future of the high street shop is at stake.

Article Tags: High Street

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