Wholesale is a state of mind

A shop has things to sell. This shop might entertain retail customers if the owner wants to make a big profit on a small investment. Because of the big margin, the turnover of cash goes down, reducing the sale amount. Now if the same counter drops the prices a bit below the market prices, the turnover begins to increase. The shop sale amount increases, and it begins to look like a wholesalecounter. Now whether the establisment makes a bigger profit out of the sale, depends on the ability of the shopowner, to balance the margin and the cash turnover. to optimise the profit. This may be reduced to a linear programming problem, where the parameters to consider are margin and turnover to maximise profit. This is necessary because a shop runs to make a profit.

The problem might become more complex due to various boundaries such as MRP, shop next door, prevailing market rates, availibity of material, customer awarness of items available, purchase practices. MRP is a fixed parameter, shop next door is not totally under our control, market rates are more or less fixed, unless you have really stiff competition from a single store like Metro. Items are more or less available, unless there is a sudden change in law or logistics. Creating customer awarness is very important to maximise turnover. In this case margin begins to have a lower weightage in the problem. Purchase department has to be very powerful. Controlling all these variable parameters is where the skill of a shop owner lies. His mind has to be on the job 24x7, or the competition begins to take over.