Wholesalers Secret 

There are 6 levels to the Marketing Channel found in the picture above. Each step of this channel is a different type of dealer, and each has there own way of dealing with consumers. In the past 20 years there has started been a shift in how consumers are purchasing there daily needed supplies. Instead of relaying on distributors, consumers found convenience in shopping at a wholesale store such as a Costco or BJ's.  A wholesaler sell have control over the price of the products and are able to save money on packaging while maintain quality when selling directly to the consumer. It is a smart strategy that allows wholesalers turn a profit as long as inventory is being flipped at a fast rate. 

Companies such as Costco pride themselves on their devote and abundant community pf members. To enter a store such as a Costco you must has a photo idea card that you show at the entrance. The card is something you have to pay a monthly fee on and for Costco it helps keep prices down. To help with membership Costco teamed up with American Express Credit Card company. Now any member of American Express is a member of Costco. The idea behind this was that people who shop at Costco are people with families. Credit card companies know that families spend a lot of money and if the families who shop at Costco use there American Express card at Costco when they shop both companies profit.

Wholesalers like Costco over the past couple of years have grown very popular within the middle class of America. Members of Costco like the exclusiveness and the bulk of products they carry. Even the Costco brand Kirkland has become popular considering they make up about 20% of products in any Costco warehouse. Costco has control over the manufacture and distributor. This allows a greater margin for profit for Costco or any company that uses that model. 

Not all wholesale companies are stores that you can walk in and pick products off a shelve. A company like amazon is a online wholesale store where orders are put in and sent out by and to costumers. Amazon is extremely convenient for customers because it gives the consumer the luxury of shopping and never leaving the house. They have even followed in Costco's membership footsteps, yet Amazon will still allow non-members to place orders. Prime memers of Amazon and benefited with lower shipping and are given the access to tones of movies and shows online to stream of their website. Amazon has evolved to become more than just a wholesaler and has became a company that has many different markets and is worth over 8 billion USD.

The wholesalers are profitable because they have access to such an abundant range of products and they are able to flip the products at such a quick rate. The ability to control the prices and sales on certain items gives the company a upper hand over distributors.