Domestic wholesaling and international wholesaling differ in several ways. Here are some of the key differences:
- Domestic wholesaling refers to the sale of goods within a country’s borders.
- Domestic wholesalers purchase goods in bulk from manufacturers and sell them to retailers or other businesses in smaller quantities.
- Domestic wholesalers optimize financially a number of operations which bring the product from the producer to the ultimate consumer, such as transportation, insurance, storage, customs, or other operations.
- Domestic wholesalers reduce transaction costs, which otherwise would have to be incurred by the other market participants.
- International wholesaling refers to the sale of goods across national borders.
- International wholesalers play a crucial role in the establishment of international distribution channels with respect to the transaction costs associated with the sale of goods on the international market.
- International wholesalers face increased competition from local and international suppliers.
- International wholesaling requires significant investments in inventory, warehouses, logistics, and more.
- International wholesalers usually offer credit terms to their customers, which can lead to cash flow challenges or bad debts if those clients default or delay payments.
- Wholesaling makes expanding into global markets much faster and easier.
In summary, while both domestic and international wholesaling involve the purchase of goods in bulk from manufacturers and their sale to retailers or other businesses, international wholesaling involves additional complexities and challenges due to cross-border transactions.