The word bulk has several different meanings. However, in nearly all cases, the term is associated with larger-than-usual quantity or size. The strategic advantages of bulk procurement are not limited to cost savings but also include improved efficiency in supply chain management and storage.
This article focuses on the meaning of the word when we use it in a business or economics context.
Bulk purchasing and selling
In the context of purchasing, the term refers to buying something in large quantities. In such cases, the purchaser manages to acquire whatever it is for a lower than normal unit price, i.e., at a discount. If a customer buys something in bulk, the supplier logically sells it in the same way.
Wholesalers and retailers
Wholesalers sell their goods in large quanitities at a discounted unit price to retailers (stores/shops). The larger the retailer’s order is, the lower the unit price will typically be. Wholesalers are businesses that buy from producers in large amounts and sell to retailers or other businesses, also in large amounts. Wholesalers are involved in both bulk purchasing and selling.
Many businesses buy in bulk
Apart from stores, other businesses also buy in large quantities, such as restaurants, schools, universities, military barracks, large offices, and hospitals. When a large hospital purchases, for example eggs, it buys hundreds of them in one go rather than just one dozen.
When the purchaser gets wholesale prices because it is a large order, we can say they bought it wholesale, i.e., the single word wholesale on its own can mean the same as in bulk.
Individual consumers
Ever since deep freezers became common household appliances a few decades ago, many individual consumers have been bulk purchasing. If you shop in a big-box store such as Costco, you have to purchase each product in larger numbers than you would in a normal supermarket.
Such buying habits not only offer savings but also reflect a shift towards more strategic, long-term provisioning within households.
These are large purchases, but in a much smaller scale than in B2B interactions. B2B stands for business-to-business, which contrasts with B2C, which stands for business-to-consumer.
Bulk cargo
If a freight ship, truck, airplane, or train is transporting a very large quantity of an unpackaged commodity, such as wheat, oil, coal, or gravel, we refer to is as bulk cargo.
The material of this type of cargo may be in particulate, granular, or liquid form. Shippers, producers, and commodity wholesalers regularly check the costs of transporting bulk commodities at the Baltic Exchange in London. The Baltic Exchange indices are also used to settle FFAs (freight futures).
Etymology
The term bulk first emerged in the English language in the middle of the fourteenth century with the meaning “ship’s cargo.” One hundred years later, the term also meant “a heap, the volume of something.”
The word originated from the Old Norse word bulki, which meant “ship’s cargo, a heap.”
Video explanation
This video explains what ‘Bulk’ is using easy-to-understand language and examples.