Trading sits right at the heart of wholesaling. A good trader is worth a fortune, writes David Gilroy.
Why do wholesalers exist? What is their purpose? When stripped right back to the basic core a wholesaler adds value by sourcing and buying goods at a competitive price in the knowledge that those goods can be sold through into a receptive market. Wholesalers break down the volume and ensure that the selling price is realistic while at the same time making a profit margin for themselves. This all sounds straightforward but throughout that journey there are many complexities. On top of this, a progressive wholesaler is expected to offer a range of additional customer services from product development through to marketing, legal advice, store facias, recipe creation – the full list is extensive. But without the core proposition being right, the wholesaler will ultimately fail. This comes down to being able to trade effectively and why I advocate that the people who do the buying/trading are the most important people in the organisation. They are the wealth creators and trade the growth engine. The rockstars of the industry.
Trade has been the lifeblood of human civilisation for millennia. From the earliest barter systems to today’s high-speed global markets, trading has continually evolved, shaping societies, economies, and political landscapes. In the modern era, trading—particularly international trade—remains a cornerstone of economic growth, development, and cooperation. The Romans codified it. “Quid pro quo” is a Latin phrase meaning “something for something” — in other words, a mutual exchange. In modern times it has developed a certain gravitas and plays a central role in legal, economic, political, and ethical contexts. The principles of quid pro quo resonate today and are pertinent to wholesale. Both parties must receive something of comparable value – reciprocity. The exchange must be consensual and free from coercion. The expectations and obligations should be clear and agreed upon. The exchange must involve lawful goods, services or promises otherwise it is not protected by legal systems. Although not always equal, a fair quid pro quo assumes that neither party is unduly exploited.
A key component of trading is deal making and it is at this point that I turn to The Donald for inspiration. Can we learn anything from his methods? His recent actions seem to shred most if not all the quid pro quo principles but there’s no doubting his success as a dealmaker. Any clues in his book “The Art of the Deal”? Trump emphasises having a grand vision and ambitious goals. He believes thinking big sets the foundation for major success. While he advocates bold risks, he also stresses risk management, ensuring there’s always a fallback plan. Flexibility in decision-making is key. Trump advises keeping multiple possibilities open to increase negotiating leverage. Understanding trends, competitors, and consumer demands gives an edge in business negotiations. Deals are not just about talk—executing effectively is what truly matters. There are some valuable learnings in his book, and it is worth a read.
Traders are indispensable in wholesale. What makes a good one? Discipline is probably the most important trait. Having a strategy, sticking to it, not overtrading and cutting losses all require discipline. Good traders keep their emotions in check and balance off the good days with the bad ones. They know when not to trade which is just as powerful as when to strike. They don’t rely on luck. They identify a trading edge that they understand and can replicate. They know how to recognise and balance risk. Constant learning is a vital characteristic whether it is technical analysis, fundamentals, market awareness, they draw on many resources to study and learn. They employ solid platforms to keep things simple and remove friction from their setups. Good traders often rely on systems, processes and rules so decisions aren’t based purely on emotion. Fast, clean execution is the maxim. Bonus traits include curiosity, confidence, humility, adaptability and tenacity.
To be effective a good wholesale trader needs a detailed, broad and deep understanding of the products and their respective markets. The food and drink sector is fast moving. Therefore, a trader must be agile and constantly up to date with pricing trends, quality standards, seasonality and logistics. Intelligent range selection is massively important. Both an art and a science it requires bang up to date knowledge and fine judgment. The trader is effectively editing the offering for the customer and in so doing must make choices on their behalf. Understanding the supply chain is a vital element – where products come from, how it moves, and the lead times involved. A knowledge of world commodity markets is essential. For example, problems with cocoa harvests, sugar production, currency shifts and even politics will affect confectionery pricing. Having a “sell-through” vision is important. The trader must visualise the goods in their ultimate consumer touch setting and understand the value proposition at that purchase point.
Excellent relationship building is core to success as a trader. Manufacturers, brand owners, buyers, logistic partners, shippers – it’s all about connections and trust is the currency. A good wholesale trader builds long-term relationships, not just quick trades. Communication skills are key. Knowing when to negotiate, when to push and when to listen. Logistics and operational savvy are important. These elements can mask many hidden costs if not properly understood and factored in. Shipping, customs, warehousing, delivery timelines and packaging needs. Inventory management, when to buy in or when to keep stocks tight will have a big impact on profitability. This leads us to numeracy, literacy and financial acumen. A good grasp of profit margins, cash flow, credit and terms is essential. These items will be written into agreements and so competency in the written word is equally important. And all of this must be recorded, monitored and measured which requires tech and data expertise to maintain product files, track deals, promotions, and analyse data and price feeds to support profitability.
Trading sits right at the heart of wholesaling. Investing in good traders and buyers is money well spent. A couple of percentage points on the margin can be worth a fortune.
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