Opening a retail outlet of wholesale business is in every way helpful and beneficial. Any person without prior knowledge of supply chain management finds it difficult to open and run the retail store. While on other hand a wholesaler who is a veteran in supply chain management techniques, when opens a retail outlet it is quite easy for him to run the retail store. Some of the major benefits for wholesalers in opening retail out are discussed below.
Manufacturers, distributors, wholesalers, retailers, etc all are links in supply chain and all holds important position. They all work independently on their positions and generate profit for themselves. If one link is removed then the supply chain becomes incomplete and disturbs the whole B2B dealings. In other case if two links merge themselves together then result will be opposite. In simple words it means that if wholesaler merges it self into retailer then the wholesaler would generate unprecedented profits while delivering the products to end-consumer in less prices and the whole supply chain circle will be completed sooner then the later.
As talked earlier that wholesaler and retailer are two separate entities; if a wholesaler merge itself into retailer then he will not have to bear the hassles of old inventory as he will transfer it on retail shop and when a product reaches at retail outlet it is sold out quickly. Wholesalers will also have to bear less transportation costs as they will be able to save a lot of money. The biggest benefit is that a middle-man (retailer) will be removed as the wholesaler will buy product from manufacturer at low bulk rates and will directly sell out the products on his retail outlet at low prices.
Wholesalers can also boost up their sales by providing discount offers to end consumers. They can do it easily as they have quite large profit margin. This discount offer on retail outlet will also help them a lot in inventory management and they will buy more products from manufacturer, making their supply chain circle to complete in less time.
Another benefit is that the wholesalers will have no tension of credit payments to be received from retailers. Many retailers delay the payments which put wholesaler in a difficult position as his capital money is blocked and he become unable to purchase new products. When wholesaler also becomes a retailer then there is no hassle and tension of credit payments. In nutshell it can be said that opening a retail outlet greatly benefits wholesaler in every way as he produces more profit and on other hand his expenditures becomes less due to less marketing and other extra costs.
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