Cash and carry wholesale trading is an approach to distribution in which small retailers and other businesses purchase goods from a wholesaler's warehouse, pay for them in cash and take the goods away themselves. Cash and carry outlets offer small businesses products at very low prices and provide an alternative to direct delivery from a manufacturer. The key difference between cash and carry outlets and other wholesalers is the element of self-service and cash payment.
Low prices meant cash and carry wholesale trading enjoyed a resurgence during and following the 2007-2009 recession. In the UK, for example, the Institute of Grocery Distribution forecast growth for 2010 of 4.5 per cent for cash and carry wholesalers, compared with 2 per cent for delivered grocery supplies and 1.5 per cent for delivered food supplies.
The main customer group for cash and carry wholesalers is the small business sector, particularly local grocery and convenience stores, restaurants, fast food outlets and other catering outlets. Schools, clubs and some non-profit organisations also use the service. Industrial cash and carry wholesalers provide small businesses and contractors with products such as electrical or building supplies.
The cash and carry operator buys stock in bulk from manufacturers and breaks it into smaller quantities stored in a warehouse. Customers select products from warehouse shelves, load them onto trolleys, pay at a checkout and load their products into their own vehicles. Although warehouse staff are available to help, customers serve themselves and deliver to their own premises.
Customers receive a membership card that entitles them to use the cash and carry service. Operators do not offer membership to consumers. Customers pay for their goods by cash, credit card or company check, rather than settling an invoice later. There is no minimum order quantity.
As well as selling branded products, cash and carry wholesalers also offer products under their own label. These are generally cheaper than equivalent branded products and enable cash and carry customers to offer consumers value-for-money products in their own outlets.
Low prices and self-service are the main characteristics of cash and carry wholesale operations. However, a number of operators are now offering customers additional services, including delivery, business development advice, field sales service and facilities for online ordering. This provides greater convenience for customers and enables cash and carry operators to compete with other wholesalers that offer customers a delivery-based service.
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