What is a primary difference between a retail dealer and a wholesale dealer?

The distinction between retail dealers and wholesale dealers centers on who they are allowed to sell vehicles to. Retail dealers are permitted to sell vehicles directly to the public, showcasing their inventory to consumers and facilitating transactions that cater to individual buyers looking for personal vehicles. This interaction often involves a more customer-focused approach, providing services such as financing options and after-sale support.

On the other hand, wholesale dealers function within a different market segment. They typically buy and sell vehicles exclusively to and from other licensed dealers, bypassing direct sales to the public. This model allows wholesale dealers to specialize in the volume buying and selling of vehicles, often at a lower cost due to the absence of a retail markup.

Understanding this primary difference is crucial for comprehending the business models of car dealerships and the regulatory requirements associated with each type. The retail model requires a different set of customer service skills and regulatory compliance compared to wholesale operations, which focus on trade relationships between dealers.