A wholesale price is the price offered to purchasers of manufactured goods or to commercial sellers in many cases. Sometimes, small warehouse stores like Costco offer wholesale prices to some of their customers who own businesses. These prices are usually about half the price of something that could be purchased at retail value. Sellers or producers of other goods (like restaurants) confer a higher price to the retail customer, often at a 100% or more mark-up.

Goods don’t just have to be manufactured; they can also be grown. A farmer for instance, offers a wholesale price to a grocery store or a produce buying company. The produce buying company may spend money to package or repackage goods for sale, usually in smaller lots. These are then sold at a retail price that is much higher than if you were to purchase the goods from the farmer on your own.

Part of the reason that manufacturers of goods or growers can offer wholesale is because they sell their goods in bulk. A grocery store doesn’t buy just one tomato from a farmer; it buys several tons of tomatoes. This way the farmer, though selling the goods at a lower price than what they would cost in a grocery store, is assured a larger sum payment for the goods, and is able to get rid of his produce. (Source: Conjecture Corporation)