Wholesale vs Retail

Most working families can relate to this concept. It is the reason why co-operative societies will sometimes buy a whole cow for slaughter to be divided among the members. This gives them access to wholesale prices and cuts out the middleman.

When you save money in the bank (through bank savings and deposit products) – that is a retail service. The folks who borrow from the bank to make more money are at the other end – they reap the wholesale benefits. For working families to secure access to the same returns available to commercial bank borrowers, requires a combination of professional expertise (legal, accounting, tax, managerial, etc) that would be ordinarily unaffordable for such families.

When 42 shareholders came together to form Guaranty Trust Bank back in the late eighties, that was a classic wholesale transaction (buy low = wholesale, sell high = retail). The bank’s valuation rose from N25 Million in 1990 to N4 Billion when the shares were first offered in 1996 (Offer by Introduction) – so that every N1 had become N160 over a 6 year period. It will take public shareholders who bought (retail) shares on the NSE (Nigerian Stock Exchange) or through public offers, another 20 – 40 years to have a shot at matching that performance.