Functions of wholesalers and retailers. What are functions of retailer in the distribution channel? 2019-02-23

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Types of Wholesalers and Retailers

functions of wholesalers and retailers

This is known as 'breaking of bulk'. They can build a good product but they need someone to sell it. The fast paced world of eCommerce has driven the wholesale model to accept dropshippers with potential fulfillment services. He provides a producer who has no marketing facilities, or who is manufacturing a narrow line and can not support a sales force, with an excellent means of reaching the market. Risk-bearing: A retailer always keeps stock of goods in anticipation of demand. A middleman is an intermediary between the producer and the ultimate or final consumer. In consumer products, they serve the single- and limited-line stores.


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Characteristics, Functions and Services of a Retailer

functions of wholesalers and retailers

These wholesalers operate like service wholesalers — except that the customer must pay cash. Since he buys goods in bulk for making them available to retailer in small quantities, he takes all the risk involved in marketing of goods. Commission merchants typically deal with agricultural goods and commodities like cement, steel, or coal and the like. Thus, a retailer provides a wide range of choice enabling the consumers to select the products of their choice. He not only assumes the risk of loss arising from a unexpected fall in the prices of goods but also the risks of damage, deterioration in quality , spoilage etc in his warehouse.

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The Role of Wholesalers

functions of wholesalers and retailers

First, each manufacturer in the absence of wholesaler would have to contact a large number of retailers. This is a very important marketing function which helps consumers make decisions. He helps to determine the resale price of goods. Cooperative Marketing Through Distributors Distributors carry out similar functions to wholesalers, but generally have closer working relationships with manufacturers. In this context, they perform various functions like sorting, breaking bulk, holding stock, as a channel of communication, storage, advertising and certain additional services. In their distribution process, they try not to flood the market with a particular product and also try to avoid shortages which might cause an increase in the prices of the goods.

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What are the Functions of a Wholesaler?

functions of wholesalers and retailers

Source of market information — The wholesalers are important source of information for the manufacturers. Distributors Work With Manufacturers Distributors frequently have a business relationship with manufactures that they represent. With new prospects, sales reps try to persuade retail buyers that certain products are in high demand and offer good revenue opportunities. Where manufacturers sell direct to customers through their own salesforce or website, they do not require intermediaries. Almost ninety percent of retailers stock their shops with numerous products that the consumer can choose from. Sometimes they even make advance payments to the producers, which is very important for producers as it enables the production process to run smoothly.

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Wholesalers Definition

functions of wholesalers and retailers

The produced goods are taken quickly by the wholesalers. These wholesalers sell out of catalogs that may be distributed widely to smaller industrial customers or retailers who might not be called on by other middlemen. These wholesalers own take title to the products they sell. Wholesalers provide services to producers and retailers in different ways. Warehousing or storage: There is usually a large time gap between production and consumption of goods.


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Top 8 Essential Functions of a Wholesaler

functions of wholesalers and retailers

The wholesalers perform the crucial function of buying goods in bulk or large quantities from manufactures and producers and then selling these goods in smaller quantities to retailers. They also pass all comments and complaints they get from the final consumers to the wholesalers who then pass the information to the producers. He packs goods in small lots for the convenience of consumers. He employs efficient methods of selling to increase his sales turnover. This function helps in easy flow of products even when the money is not immediately exchanged. The products reach the consumers as intended by the manufacturer without wear and tear.

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What is Wholesaling

functions of wholesalers and retailers

However, a comprehensive retail marketing function requires a combination of many activities. Manufacturers, in their turn, learn of , delivery delays, and. They may employ their own vehicles for transportation. Functions of a Wholesalers The most important functions of a wholesaler in the marketing of goods are as under:- Assembling The wholesaler buys good from different manufacturer producing the same streak of goods. Most often, wholesalers do not sell directly to individual customers, but rather sell goods directly to retailers who are then able to sell to individual customers. Wal-mart is the biggest retailer in the world.

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10 Important Functions Of Wholesalers In Channel Of Distribution

functions of wholesalers and retailers

This demand creation is quite helpful for manufacturers and wholesalers. The quality of the products is kept intact. For example, launch of a new product by a manufacturer, market position of a manufacturer, etc. The wholesaler can operate at lower cost because the retailers take over many wholesaling functions. Retailers using wholesale services are typically selling other brand products. The storage of goods is needed on account of time lag between production and consumption of goods. They store these products in their warehouses, and ensure supply of product as per demand in particular region.

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Functions of Wholesale trade: To the retailers and consumers

functions of wholesalers and retailers

Secondly, the retailers arc scattered throughout the country and contact between such widely scattered retailers and the manufacturers would be very expensive. Additional Services Retailers ease the change in ownership of merchandise by providing services that make it convenient to buy and use products. He acts as the medium through which the goods produced by manufacturer is put into the hands of the retailer. The wholesaler will always be able to offer a lower price than the retailer because the wholesaler has a relationship with the manufacturer and buys products or goods directly from the manufacturer. By handling perishable products in general demand — tobacco, candy, potato chips, and salad dressings — truck wholesalers may provide almost the same functions as full-service wholesalers.

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Functions of Wholesalers : Selling And Dividing

functions of wholesalers and retailers

Financing: Some retailers grant credit to customers and provide the facility of return or exchange of goods. The information about demand, competitors, customer preferences as well as substitute products is available with wholesalers. The producers see this as a great relief since they do not have to go through the trouble and cost of holding large stock. Financing: A wholesaler often provides advance money with orders to manufacturers. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. In addition, he often sells goods on credit basis to retailers.

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