B2B wholesale plays a vital role in the flow of goods from manufacturer to consumer. Wholesalers act as key intermediaries in the supply chain for most industry sectors, buying goods from manufacturers and reselling them in bulk to retailers and other organizations.

B2B wholesale trade accounts for a significant slice of total business activity in the US and worldwide: The US wholesale sector is predicted to generate $17.5 trillion in revenue in 2025, according to IBISWorld, and employ nearly 7 million people, according to the US Bureau of Labor Statistics. Here’s a deep dive into how B2B wholesale trade works, along with benefits and challenges, tips for running a successful B2B wholesale business, and strategies for taking advantage of B2B wholesale ecommerce platforms.

What Is B2B Wholesale?

B2B wholesale involves selling goods in bulk to other businesses, rather than selling them direct to consumers (DTC). Wholesalers typically buy large quantities of products or other goods from producers, such as manufacturers. They store the goods in warehouses and then resell and ship them in smaller quantities, at discounted prices, to retailers or other businesses.

By focusing on B2B sales, as opposed to DTC sales, wholesalers can maximize sales volume and average order value. Because wholesalers often supply goods sourced from many different manufacturers, they provide a convenient source for business buyers to obtain much of their inventory. Take the example of a book distributor that supplies retail bookstores, which then resell the books to consumers. The wholesaler offers the books to bookstores at a substantial discount from the list price. The bookstores make a profit by reselling the books to consumers at the list price.

Key Takeaways

  • B2B wholesalers buy products in bulk and resell them to retailers and other businesses.
  • Compared to DTC sales, B2B wholesale offers a number of advantages, including higher sales volume and average order value.
  • Online marketplaces and ecommerce are becoming increasingly important in B2B wholesale.
  • Cloud-based ERP software suites can help B2B wholesalers remain agile and competitive in the rapidly changing market.

B2B Wholesale Explained

Many B2B wholesalers focus on sales to retailers, but some wholesalers also sell directly to large organizations. These companies buy products in big enough quantities to qualify for volume discounts. Wholesalers’ customers include:

  • Retailers and other resellers, which buy products at wholesale prices and sell them to consumers at a higher price, with little or no modification.
  • Government agencies often have bulk purchasing power that commands discounts. They use the goods internally.
  • Institutions, such as schools and hospitals, are often able to buy in bulk quantities at a discount.
  • Some manufacturers buy goods from wholesalers and transform them into other products. For example, a manufacturer may buy a range of components from wholesalers and assemble them into products for sale.

Wholesalers often specialize in specific industries or product categories, including:

  • Home and kitchen products
  • Consumer electronics
  • Industrial and science
  • Healthcare, including pharmaceuticals
  • Clothing
  • Beauty and personal care
  • Sports apparel and equipment
  • Books and stationery
  • Automotive products

B2B Wholesale Business Examples

B2B wholesale plays a prominent role in just about every industry sector, from health care and industrial machinery to food.

  • Wirsam Scientific distributes a vast range of scientific instruments, from microscopes to X-ray analytical equipment, to labs across sub-Saharan Africa. When unwieldy systems hampered the company’s continued growth, the company switched to an end-to-end cloud-based platform to run its business. By doing so, Wirsam automated management of transactions in multiple currencies and gained a unified view of sales orders, invoicing and purchasing across 20,000 SKUs. The system helped Wirsam cut delivery lead times and reduce IT costs.
  • Most pharmaceuticals in the US pass through wholesale distribution before reaching medical professionals and consumers. McKesson is a key player in that wholesale distribution network. It has built relationships with many leading pharmaceutical manufacturers and makers of medical equipment. The company distributes a wide range of pharmaceuticals and other medical products to pharmacies, hospitals, health systems, and clinics. The company delivers more than a third of all prescriptions in the US, supplying more than 40,000 customers.
  • MRS Packaging distributes food and beverage products across the Middle East. It has led the way in catering to the expanding tastes of consumers in those countries, with products like nachos, hotdogs, and flavored popcorn. To support its 300% business growth in just a few years, the company implemented a cloud-based ERP system. NetSuite helped the company simplify and automate interactions with suppliers around the world, while supporting local taxation rules and multiple languages. Improved supply-chain control eliminated stockouts and reduced inventory by up to a third.

Benefits of B2B Wholesale

The B2B wholesale model offers a range of benefits for companies throughout the supply chain—not only for the wholesalers themselves, but also for manufacturers and retailers.

  • Higher average order value: Each B2B wholesale transaction generates much more revenue than individual product sales to consumers.
  • Higher sales volume: The ability to sell in bulk means that wholesalers typically enjoy a higher overall sales volume through repeat purchases.
  • Broader market access: The wholesale distribution model helps products quickly reach a wider audience. Wholesale distributors can be highly effective in driving business through retailers. As a result, distributing products through wholesalers can help manufacturers quickly achieve market access and visibility that might otherwise take years to develop.
  • Specialization: Relying on wholesalers for distribution enables manufacturers to focus their energies on designing and making products. By turning their sales over to intermediaries, they can avoid building and maintaining an expensive sales function. Wholesalers typically build up deep expertise in specific product categories and retail sectors to ensure a steady supply of the products retailers need.
  • Warehousing and inventory management: Wholesalers often take on much of the responsibility for warehousing and managing product inventory. That helps manufacturers and retailers keep their costs down.

B2B Wholesale Challenges

B2B wholesale business can be challenging. Wholesalers must maintain operating efficiency while managing often complex relationships with their business customers. They also face new competition from online B2B marketplaces. Here are some of the key challenges.

  • Customer relationship management:

    Business buyers usually take longer to make purchasing decisions than consumers. But once they’ve picked a B2B wholesale supplier, they may buy from them many times. So, for wholesalers, forging and maintaining strong relationships with customers is very important. B2B wholesalers need to focus on making the most of every step in the customer’s journey, from product evaluation to sales and support.

  • Operating efficiency:

    Because wholesalers have a considerable investment in inventory and sell goods at discounted prices, they must operate efficiently to maintain profitability. Streamlined warehousing, inventory management, ordering, and fulfillment processes are critical. Customers typically expect to be able to order online, so it’s important to have an easy-to-use ecommerce presence that’s integrated with inventory management and fulfillment.

  • Managing cash flow:

    Wholesalers often sell on credit, so the ability to effectively track and manage accounts payable is vital to maintaining a healthy cash flow.

  • Competition from online marketplaces:

    New competitors to established B2B wholesale distributors include online B2B marketplaces and online retailers that are shifting into B2B sales.

  • DTC sales:

    Some manufacturers are bypassing wholesalers for at least part of their product sales. By selling direct to consumers, the manufacturers aim to increase profit margins and gain greater control over the consumer experience.

How Do You Get Started Selling B2B Wholesale?

Selling B2B wholesale requires creating a reliable, repeatable system to both support business goals and meet retailers’ distinct needs. The following steps outline a strategy for a successful operation that offers more than just bulk pricing.

  1. Define Your Market and Channel Strategy

    B2B wholesalers must clearly define and deeply understand two audiences: the retailers that buy from them and the end users who buy from those retailers. Conduct market research to identify retailers that successfully sell similar products in regions where your target users are active and assess their brand compatibility. For example, a wholesaler specializing in ethically sourced products should seek out retailers that promote eco-friendly merchandise and responsible sourcing.

    After conducting market research, explore sales channels. Online storefronts provide full pricing, branding, and ordering control, while B2B marketplaces have wide buyer networks but impose fees and other limits. Another avenue to explore is trade shows, which present opportunities for networking and product demonstrations. The strongest strategies tend to combine these channels, allowing wholesalers to strike a balance between market reach, control, and costs.

  2. Establish Pricing Tiers and MOQ

    Successful pricing models protect profit margins while incentivizing retailers to buy in bulk. They depend on accurate cost per unit calculations, which must factor in all expenses related to materials, labor, and operational overhead. Use those numbers to develop wholesale prices that yield desired margins, plus suggested retail prices to avoid undercutting and help retailers appropriately position products. Create pricing tiers—lower per-unit prices for larger orders—to reward high-volume buyers and encourage ongoing business. From there, set minimum order quantities (MOQs) that maintain margins by accounting for production expenses, shipping costs, and payment processing fees. Consider lower MOQs on initial orders to attract first-time buyers.

  3. Create Your Marketing and Sales Strategy

    Marketing and sales plans help wholesalers reach more retailers, including those with existing supplier relationships. Identify your ideal wholesaler and develop messaging that addresses their specific needs, such as higher margins, exclusive products, or easier ordering processes. Then consistently deliver that messaging through the proper channels, which may vary depending on retailer type. Trade shows may be more effective for reaching small retailers that value in-person interactions, while letters and emails to purchasing departments may work better for larger customers. Digital marketing campaigns enhance these efforts by generating brand awareness and building a funnel of qualified buyers.

  4. Plan Your Customer Service Experience

    Long-term relationships are the key to growth in B2B wholesale, so proactive customer service across all areas of the business is vital. Offer flexible payment terms, such as post-delivery invoicing or net-30 terms, to demonstrate an understanding of retailers’ cash flow needs. Invest in inventory systems that prevent conflicts between wholesale and retail orders or consider a third-party logistics (3PL) provider to streamline the entire process and reduce fulfillment burdens. Share marketing materials and provide previews of upcoming products to encourage collaboration and joint success. When problems arise, respond quickly and empathetically to build trust and strengthen the relationship.

  5. Monitor Performance and Continuously Improve

    Track sales performance by channel, repeat orders by retailer, and customer retention to identify growth opportunities and areas for improvement. Conduct retailer surveys and check in with buyers to uncover insights the data alone might miss. If certain segments are underperforming, A/B test pricing tiers, MOQs, promotions, and messaging to develop more successful approaches. In addition, regularly evaluate logistics partners to maintain low costs and high services.

5 Tips for Running a Successful B2B Wholesale Business

Running a successful wholesale business involves juggling multiple priorities at the same time—optimizing inventory, keeping customers happy, and managing cash flow and profits. Here are some useful tips:

  1. Focus on Efficient Inventory Management

    The ability to efficiently manage inventory is at the heart of any successful wholesale operation. B2B wholesalers must be able to accurately track what’s in warehouses, replenish inventory based on demand, and pick inventory efficiently when fulfilling orders. Sophisticated inventory management software can help by tracking inventory throughout the supply chain and automating reordering, based on factors such as current inventory levels and customer demand forecasts. Inventory management software helps increase revenue and profit by ensuring that wholesalers have just enough inventory to meet demand without over-ordering.

  2. Automate Operations With an Integrated Software Platform

    Supporting operations with an integrated suite of applications can dramatically boost efficiency, responsiveness, and customer satisfaction. Leading B2B solutions empower wholesale companies to automate processes ranging from ordering and inventory management to ecommerce. Technology can make virtually any repetitive task more efficient by automating time-consuming, error-prone manual steps. In addition to making processes smoother and reducing costs, automation can increase customer satisfaction and, therefore, drive more business purchases.

  3. Build Strong B2B Customer Relationships

    Each business customer can generate considerable revenue over time, so it’s important to foster relationships to ensure that customers are happy and continue to buy from you. Getting closer to customers also helps B2B wholesale suppliers better understand customer needs and develop targeted wholesale marketing strategies.

  4. Stay on Top of Cash Flow

    Closely monitoring accounts receivable and accounts payable helps make sure B2B wholesale businesses don’t run into cash flow problems. With large amounts of money tied up in inventory, many wholesalers need to be sure that customer payments arrive and supplier bills get paid on time. Accounting software that provides up-to-date insights into the current status of outgoing and incoming payments can help businesses accurately forecast and manage cash flow.

  5. Carefully Manage Discounts

    Offering substantial discounts can attract customers, but those discounts also eat into profits. Big customers may add enough volume to justify special terms, but scrutinize each situation to protect profit margins.

B2B Wholesale Platforms: How They Work

Traditionally, B2B wholesale deals have involved person-to-person negotiations between wholesalers and their customers, together with many manual steps to process orders and buy, manage, and ship inventory. However, technology is transforming the B2B wholesale sector. Companies can run their entire business on integrated cloud-based software suites that increase operating efficiency and agility.

Technology is also transforming the interactions between wholesalers and their customers. Ecommerce accounts for a growing percentage of B2B sales. Important ecommerce trends include the growth of B2B wholesale platforms, also known as B2B exchanges, which are online marketplaces specifically designed for B2B wholesale transactions. They make money by charging vendors and buyers commissions or other fees for business conducted via the platform.

B2B wholesale marketplaces allow wholesalers to list products for sale. B2B buyers can then purchase them via the platform. The platforms typically provide additional services to support those transactions, such as online payments and electronic communications between buyer and seller.

In some cases, B2B marketplaces have made it easier for small resellers to buy products from wholesalers. Previously, they may have struggled to get the attention of wholesalers; now, they can use a self-service wholesale ecommerce platform to buy the goods they want. Similarly, smaller vendors can enter the B2B wholesale market simply by listing their wholesale products on one of these marketplaces. Many B2B wholesale exchanges focus on specific vertical industries. For example, the Indian website Fibre2Fashion.com focuses on serving the textile, garment, and fashion sector.

B2B Wholesale Platform Features

B2B wholesale platforms offer many of the same features as business-to-consumer retail online marketplaces. That’s partly because business buyers now demand the same ease of use and shopping convenience that they’ve come to expect in their everyday purchases as consumers. In addition, B2B platforms may offer additional features tailored to the needs of B2B buyers. Key features of a B2B wholesale platform include:

  • Price transparency: Users can see discounts at different quantity levels.
  • Product choice and price comparison: Buyers can see products and compare prices from different vendors.
  • Information about business partners: Most B2B wholesale platforms require companies to register and provide information about themselves. This helps vendors and buyers gather details about potential business partners up front. For example, one major marketplace displays profiles for suppliers, showing their historical on-time delivery rate, response time, total transaction value, and more.
  • Product discovery: Search functions enable buyers to find products they might not have known existed.
  • Vendor messaging: B2B wholesale platforms allow buyers to contact suppliers directly to negotiate pricing and arrange other aspects of the transaction.
  • Reviews and ratings: B2B exchanges may include ratings and reviews based on previous transactions, to improve trust and hold each party accountable.
  • Promotions: Vendors can opt to promote products via special offers and time-limited discounts.
  • Certification: Some platforms offer wholesalers a “certified” status that demonstrates the wholesaler’s commitment to quality and delivery.
  • Escrow accounts: Some platforms provide escrow services that protect buyers and sellers by securely holding the buyer’s funds and releasing them to the seller only upon shipment of goods and fulfilment of all other contractual obligations.

Choosing the Right B2B Wholesale Platform

B2B wholesale platform selection is a major decision that affects a company’s efficiency, growth potential, and customer relationships. It requires an in-depth understanding of business objectives and a thorough assessment of requirements, such as distributor-specific capabilities and support for complex workflows. Organizations must also consider a platform’s ability to deliver the buying experience that their target audiences expect.

Scalability is a critical factor; platforms should be able to accommodate expanding product catalogs and increasing order volumes without performance bottlenecks. The ability to integrate with ERP, CRM, and other business systems streamlines operations and reduces manual work. Automation can further improve the efficiency and accuracy of key workflows, such as invoicing and order approvals. In addition, organizations will need appropriate security features that comply with applicable industry regulations and support easy data migration to other providers if needed.

Vendor stability, support, and ecosystems are also important considerations. A provider with a strong, reference-supported track record and a clear roadmap demonstrate long-term stability. An active user community, third-party app marketplace, and access to training resources help maximize the platform’s value.

How to Manage B2B Wholesale Ecommerce

When it comes to selling online, wholesalers can offer goods through their own website, join an existing B2B ecommerce marketplace, or do both.

The advantages of selling through your own website include greater control over ecommerce site design and product presentation and the B2B sales process. This process also eliminates extra fees involved with an exchange. Disadvantages of this approach include having to supply the resources required to build and maintain the website, in addition to marketing efforts required to attract potential buyers.

Participating in an existing B2B wholesale exchange can provide a faster way to reach new customers, since these marketplaces make it easy to list wholesale products, and they have a ready-built audience of buyers. However, additional platform fees and/or commissions can reduce profit margins. In addition, suppliers have less ability to differentiate the way their products are presented, since platforms typically force suppliers to use a limited set of templates.

B2B Wholesale Trends

Advancements in technology and evolving buyer expectations are bringing significant changes to the B2B wholesale industry. AI is at the forefront of this transformation, improving inventory management, forecasting, and procurement. Automating these and other tasks allows teams to focus more on strategy and relationship-building. Additionally, AI enhances personalization, which has become imperative as B2B buyers expect more consumer-like experiences. With clean data and integrated systems, wholesalers can use AI to customize promotions and product recommendations across channels, improving conversion rates and increasing sales. More businesses are also offering flexible payment and financing options to improve the buying experience. Adopting digital payment tools and offering extended credit terms help remove friction from the purchasing process and maintain strong retailer relationships.

With this increasing reliance on technology, businesses have increasingly prioritized cybersecurity. As operations become more connected, the risk of cyberattacks increases. Wholesalers are responding by investing in advanced security protocols and workforce training to protect sensitive data and maintain customer trust. Meanwhile, sustainability is shifting from a unique selling point to a baseline expectation, with buyers increasingly drawn to eco-friendly practices. such as recyclable packaging, energy-efficient warehousing, and circular supply chains. The most successful B2B wholesalers will be those that keep a finger on the pulse of their buyers and quickly adapt to changing needs.

Run Your Wholesale Business on NetSuite

With NetSuite’s platform for wholesale distribution, wholesale distributors can increase efficiency and responsiveness with a single, integrated platform they can use to run the entire business, from ecommerce and order management to inventory management and financials. NetSuite gives companies real-time visibility across the entire business, automates operations, optimizes supply-chain management, and facilitates omnichannel commerce. From demand-based planning to best-of-breed financial management, NetSuite gives wholesalers efficient and agile tools to achieve lasting success in a highly competitive, fast-changing environment.

B2B wholesale continues to play a critical role in the supply chain for nearly all goods. The wholesale sector is experiencing rapid change, due to factors including the rise of ecommerce, online marketplaces, and DTC sales. Cloud-based ERP software suites can help B2B wholesalers stay competitive through the latest innovations in automation, data management, collaboration, and AI-powered tools.

B2B Wholesale FAQs

How do B2B wholesale companies make money?

B2B wholesale companies make money by buying products in large volumes at low prices from manufacturers and selling them in smaller quantities at higher prices to retailers or other business customers. They must make enough profit to cover the costs incurred for warehousing, inventory management, and other operations.

What is a B2B marketplace?

A B2B marketplace, also called a B2B wholesale platform or exchange, is an online marketplace that connects B2B sellers and business buyers. Marketplaces typically enable retailers and other businesses to buy products in bulk and receive per-unit discounts.

What is a B2B wholesale business?

A B2B wholesale business is a company that generates revenue by buying products from manufacturers and selling them in bulk to retailers or to large organizations that use the products internally, such as government agencies or other institutions.

What is B2B wholesale ecommerce?

B2B wholesale ecommerce is when a B2B wholesale company makes sales online. A B2B wholesaler can conduct ecommerce sales through its own website or through an externally managed ecommerce site, such as a B2B marketplace.

What is an example of a B2B business?

A good example of a B2B business is cereal-maker General Mills. Although its products are eaten by consumers, it mostly sells to businesses such as wholesalers and big supermarket chains. Those companies then resell the products to consumers.

What is an example of a wholesale business?

A wholesale business is a company that earns its revenue by bulk-buying goods from suppliers and, in turn, selling in smaller bulk quantities to merchants or other companies. In the US, one prominent wholesaler is Sysco, which distributes food, kitchen equipment, tableware and other goods to more than 600,000 restaurants, hotels, hospitals, caterers and other businesses.

Is Amazon a wholesaler?

Amazon is primarily considered a retailer, not a wholesaler, because most of its sales are to consumers rather than businesses. However, Amazon also operates a B2B marketplace that enables wholesalers to sell to other businesses.