What distinguishes wholesale from retail?

Trade is 2 major types — wholesale and retail. What are the specifics of each of them? What distinguishes wholesale from retail?

The content of the article

What are the specifics of wholesale trade?

In the legislation of the Russian Federation wholesale trade is defined as the commercial activities associated with the purchase and sale of goods for their business use (e.g., for resale) — that is not for personal consumption. Wholesale trade is most often conducted at the conclusion of supply contracts. Under the relevant suppliers passed within the deadlines issued by them or purchased from partners the goods to your buyer for further business use. Thus wholesale trade can be called and the primary subject of the relevant treaties.

The buyer of the goods within the opt is most often an individual entrepreneur (e.g. shop owner) or a legal entity. But it happens that in the respective contracts involved and the individuals. However, the subsequent resale of the goods may be not too advantageous from the point of view of taxation. Therefore, to participate in wholesale transactions of citizens, usually registered as sole proprietors or founders of economic societies.

Strictly speaking, SP is also a physical person, registered in the state bodies in the established order as a business entity. But when dealing with goods (for example, if we are talking about the resale of goods bought in bulk), the entrepreneur often has the right to use a tax regime with a lower load payment than natural persons, not registered as individual entrepreneurs.

As a rule, wholesale supplies involve sale of goods in large volumes. Thus the cost of 1 unit of output within a big party is usually much lower than if goods were purchased in smaller lots or individually. The result is that the wholesale buyer of the product may profitably resell the purchased goods.

to table of contents ↑what is the specificity of retail trade?

The Russian legislation defines retail trade as a commercial activity in which the supplier sells it to the buyer for the further use of the product for personal purposes of the person who bought the product — that is, not connected with entrepreneurial activity.

The buyer of the product at retail is often a physical person. Sometimes an individual entrepreneur, which from a legal point of view, as we noted above, also acts to natural persons. Participant retail transactions may be the organization if the goods purchased by its owner in accordance with the law is going to use not for business and for personal purposes.

Retail sold, usually, a single product or supplied under a relatively small parties.

to table of contents ↑the Difference between the wholesale and retail trade

The main difference between wholesale trade retail lies in how the goods purchased from the supplier used by the purchaser. When opt is for a further involvement in the business (for example, implementation of resale). If the retail purchased product is used personally by the purchaser, members of his family or other persons whom he can transfer the goods.

As a rule, parties to transactions in wholesale trade are legal entities and individual entrepreneurs, rarely — individuals. In retail, individuals accept, in turn, a much more prominent part.

Wholesale transactions often involve the delivery of large shipments. Retail — on the contrary, are characterized by relatively small volumes of purchases.

Defining the difference between the wholesale and retail trade, reflect the findings in the table.

to content ↑Comparative table

Wholesale trade
Retail trade

Involves the sale of goods that are further used by the buyer in the business (for example, for the purposes of resale)
Involves the sale of goods that are further used by the purchaser for personal purposes

Parties wholesale transactions are, as a rule, legal entities and individual entrepreneurs, physical persons — very rare
Individuals regularly participate in retail transactions (often as buyers of commodities)

Wholesale contracts often involve the supply of large quantities of goods, which can, for example, it is advantageous to sell separately in the future
Retail transactions typically involve the sale of individual products or relatively small batches

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