From producer to consumer

Many people help a market run smoothly. Follow a sack of grain from the field to your kitchen and you'll meet them all!

Wholesalers buy in large amounts from the producer or manufacturer. Grains, vegetables and fruit are bought straight from farms.

The produce is stored in big warehouses called godowns. Things that spoil fast (perishables) go into cold storage, special warehouses kept cold. Then they go to wholesale markets called mandīs. There are wholesale markets for many things: chemicals, electronic parts, building materials, car parts ... Delhi's Khari Baoli, for example, is a huge wholesale market for spices and dry fruit.

Wholesalers supply the shops near our homes. These shopkeepers are retailers; they sell to final consumers like us, in small amounts. Think of rakhis: the shop near you buys 200 or 300 in bulk, so that it can sell you ten.

The real difference: a wholesaler sells to someone who will sell it again; a retailer sells to someone who will use it. Retailers also sell services: salons, cinemas, restaurants.

Sometimes wholesalers can't reach every retailer, because of distance or difficult land. Distributors bridge the gap, supplying goods from manufacturers and wholesalers to retailers. You may have seen one: a man on a motorbike going from shop to shop, writing down what each shopkeeper wants, then bringing it. (Remember the milk middlemen in the Amul story?)

Online markets work differently. Manufacturers send large amounts to the warehouse of an online-selling business. You order on its website or app; it packs the item and delivers it to you.

These businesses are aggregators: one app or website that gathers offers from many sellers and sells them to consumers in one place.