wholesale market

Early roots

Long before modern companies existed, economies still needed people and firms that could bridge distance, timing, and risk between producers and buyers. Economic historians describe the rise of merchants and other intermediaries as a recurring feature of market development, including in ancient trade and later market commerce.

Medieval to early modern era

In medieval Europe, merchant guilds organized long-distance commerce and also participated in local wholesale trade. These guilds protected members, negotiated privileges, and in some places influenced city government and rules that shaped how goods were distributed and sold. In many regions, food distribution also relied on wholesale markets where trade concentrated in one place. Over time, wholesale markets became important for matching supply with demand and supporting price formation in urban food systems.

Modern era till 1900

Wholesaling was central to economic development, especially in periods when manufacturing and retail were still small-scale. Before 1850s, wholesale merchants were multipurpose connectors who often provided financing, warehousing, information, freight coordination, and risk-taking, and who helped establish broader market systems. As transport and communication improved, wholesaling expanded and professionalized. From the mid-1850s, national markets began to take shape "due in part to the telegraph, the railroad and maritime transportation," increasing the separation between producers and buyers and creating larger "market gaps." As mass production emerged toward the end of the 19th century and producers clustered near inputs and transport, market gaps widened further, and a broader class of middlemen grew to close those gaps.

First half of 20th century

In the 20th century, many cities built or reorganized formal wholesale market systems for food distribution. For example, Osaka's municipal government documents that its Central Wholesale Market opened in November 1931, following licensing and consolidation steps earlier in the century, and that the wholesale system resumed after wartime disruption. At the same time, the role of wholesale markets changed in many countries as retail formats evolved. FAO notes that the characteristics of wholesale markets have changed "considerably over the last century," in part due to urban growth and the rising role of supermarkets, which changed how food distribution needed to work.

Second half of 20th century

Several operational breakthroughs reshaped wholesaling and distribution globally. Large-scale distributors regained more control over distribution in many categories.:

Containerization (1956): The container ship Ideal X sailed in April 1956 carrying standardized containers, a milestone that helped cut loading time and supported the rise of modern global supply chains.

Cash-and-carry wholesale (1960s): The launch of METRO Cash & Carry in 1964 in Germany as a model where professional customers selected goods under one roof, paid, and took items directly, a format that spread internationally.

Distribution centers (early 1970s): Walmart's first distribution center and home office opened in Bentonville, Arkansas in 1971, reflecting the broader shift toward centralized warehousing and controlled replenishment.

Merchant wholesalers

These firms take ownership of inventory and earn a margin by buying and reselling. They can specialize by product (food, pharmaceuticals, industrial inputs) or by customer segment (construction trades, hospitality, public sector).

Large organized wholesale markets

Some countries operate huge, centralized wholesale markets that serve as key price-formation and distribution points for food and consumer goods. Examples:

Central de Abasto (Mexico City), described as the world's largest wholesale market by land area in a major regional publication, with very large daily merchandise volumes.

Birmingham Wholesale Markets are the largest combined wholesale fresh produce markets in the United Kingdom, with 90 trading units totalling 31,000 m2 (330,000 sq ft).

Regulation and Taxes

Resale exemptions and sales tax (United States)

Often, in the United States, wholesalers are not required to charge their buyers sales tax, if the buyer has a resale license in the state the wholesaler is located. Out-of-state buyers are not charged sale tax by wholesalers. Documentation requirements vary by state.

VAT systems

In Europe, Value-Added Tax (VAT) rates vary among member states, with a standard rate that cannot be less than 15%. Countries like Hungary, Croatia, Denmark, and Sweden have higher standard VAT rates, while Luxembourg, Malta, Cyprus, Greece, Germany, and Romania have lower rates.

In China, wholesalers were subject to a Value-Added Tax (VAT) of either 9% or 13% on imported goods, depending on the type of product. Additionally, consumption tax is levied on products such as tobacco, alcohol, and luxury goods. These taxes are part of China's broader strategy to promote domestic consumption and regulate imports. A recent set of summaries of China's VAT law changes describes a maintained multi-rate VAT structure, including 13% for many goods sales/imports and other rates for specific categories.

On the other hand, Vietnam imposed a standard VAT rate of 10% on most goods and services, with exemptions for certain agricultural products and essential services. In recent years, Vietnam has used a temporary VAT reduction policy with an extension of an 8% rate for many goods and services (with notable exclusions) through the end of 2026.