We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is a Primary Market?

Malcolm Tatum
By
Updated: May 17, 2024
Views: 11,796
Share

Primary market is a term used in both business and investing circles. In investing, the term relates to outlets that make it possible to acquire newly available investments, such as recently issued shares of stock or new bond issues. In business circles, a primary market refers to the first tier of interaction between manufactures and customers, where purchases of goods and services occur.

For investors, identifying the presence of a primary market is important when it comes to securing new stock issues and other types of new investments. This market may involve the presence of intermediaries who process the purchase of the investments on behalf of the issuing entities. An intermediary may be a broker or dealer who has knowledge regarding upcoming initial public offerings, or the new issue of bonds. While it is possible for individual investors to have access to a primary or new issue market, the use of intermediaries often simplifies the process of finding and securing desirable investments.

In a primary market focused on investing opportunities, investors are able to secure recently issued investments at the public offering price initiated by the issuer of the stocks. This price is often desirable, since once the first phase of the public offering is completed, there is a good chance that the price per share will increase as the new stock is actively traded on an open market. For this reason, a primary market is often seen as the best way to acquire new issues and begin to generate a return almost immediately.

For manufacturers who are looking for ways to sell their products, a primary market is often the stores or dealers who are willing to purchase the products in bulk, then resell them to consumers. The retailer may be a locally owned business that purchases directly from the manufacture, or some type of retail consortium that has made a special arrangement with the manufacturer to purchase the products in bulk on behalf of the consortium members. Large chain stores may also represent a primary market, since they are likely to purchase large volumes of products for distribution and sale in many domestic and even international locations.

Even companies offering services will seek to identify a primary market of consumers that are highly likely to find the services offered to be desirable. For example, a business that offers audio and web conferencing solutions may identify retailers as the primary market for their communications tools, while also seeking to build a secondary market within the legal industry. The identification of primary and secondary markets is often a good idea for any business, since it creates a situation where the client base is more diversified, and thus less dependent on one industry type to remain profitable.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Editors' Picks

Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
Share
https://www.wisegeek.net/what-is-a-primary-market.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.