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Supply Chain

What Is The Supply Chain?

Manufacturers, suppliers, wholesalers, and distributors all play distinct roles within the supply chain:

  1. Manufacturers: They are responsible for producing goods. From various materials or components, they make finished products using various processes. Manufacturers range from small-scale producers to huge industrial facilities.
  2. Suppliers: They provide the materials or components to the manufacturers to produce their goods. These might be raw materials, parts, or equipment used by the manufacturer. In some types of retail operations that manufacturer may be you. For instance, many bath & beauty shops make their own soaps and lotions. Suppliers can be separate companies from the manufacturers but in some cases they are “vertically integrated” meaning the manufacturer also owns the source for raw materials.
  3.  Wholesalers: They buy goods in large quantities from manufacturers and store them in warehouses. They resell these goods in smaller quantities to retailers. Wholesalers usually do not alter or repackage any goods, focusing on storage, bulk purchasing, and resale.
  4. Distributors: They get finished products from manufacturers to end retailers and sometimes directly to consumers. They handle storage, transportation, repackaging, and even marketing. Distributors may work with multiple manufacturers and supply products to various retailers or consumers. Some businesses are vertically integrated from the supplier to the consumer. Using our bath & beauty example, one such business is the Body Shop, which sources raw materials, manufactures, distributes, and retails everything itself.

In summary, manufacturers produce goods, suppliers provide necessary materials for production, wholesalers buy in bulk and then resell, and distributors ensure these finished products reach the retailers and consumers efficiently. While there can be some integration of these roles they generally represent separate stages in the supply chain.

Related Topics:

Buying Strategies and Dealing With Suppliers

Upselling, or how to increase customer spending

Secrets Of Niche Market Domination

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