Wholesaling

Wholesaling includes all activities involved in selling services and goods to those buying for business or resale use. We call wholesalers those firms engaged initially in wholesaling activity. Wholesalers purchase mostly from producers and sell mostly to industrial, retailers, consumers, and other wholesalers. But why are wholesalers utilized at all? For instance, why would a producer utilized wholesalers instead of selling directly to retailers or consumers? Quite easily, wholesalers are frequently better at performing one or more of the following channel functions:

Selling and promoting:  Wholesalers' sales forces help producer reach various small customers at a low cost. The wholesaler has more contacts and is frequently more trusted by the purchaser than the distant producer.

Buying and assortment building: Wholesalers can choose items and build assortments required by their customers, thereby saving the consumers much work.

Bulk-breaking:  Wholesalers  save  their  customers  money  by  purchasing  in  carload  lots  and breaking bulk (breaking big lots into small quantities).

Warehousing: Wholesalers hold inventories, by this means dropping the inventory costs and risks of customers and suppliers.

Transportation: Wholesalers may provide rapid delivery to buyers because they are closer than the producers.

Financing: Wholesalers usually finance their customers by giving credit, and they often finance their suppliers by ordering early and paying bills on time.

Risk bearing: By accepting title and bearing the cost of, damage, theft, spoilage, and obsolescence, wholesalers absorb risk.

Market information:  Wholesalers provide information to suppliers and customers regarding new products, competitors and price developments.

Management services and advice: Wholesalers frequently help retailers train their salesclerks, develop store layouts and displays, and set up accounting and inventory control systems.