Do Wholesalers Need Finance?

An organization that purchases large stocks of goods from manufacturers and makes them available to stores, is a wholesaler. The wholesaler does not interact with the end-user directly. Instead, a wholesaler sells the goods to stores like retail shops in bulk for the ease of the consumer.

The globe is speckled with a large number of remarkable businesses. Countries like UK bear a reputation for world-class manufacturing companies that sell goods to large retailers and wholesale resellers. Middlemen like eCommerce sites, supermarkets, high street retailers and department stores have long payment terms. Some can take as long as 120 days. Hence, it is important to obtain finance to generate cash flow for working capital.

The big difference between the delivery of goods and receiving payments results in an uneven cash flow. This can severely limit the growth potential of the company. Without much working capital and assets, companies find it difficult to enhance their performance and increase production for customers.

A wholesaler can obtain finance to make their cash flow even. This increases the company’s potential for growth. By obtaining finance, wholesalers can increase their supply and take more orders from customers.