The presence of wholesalers in distribution channel is very important. Besides the functions of buying and selling or exchanging goods, the wholesalers also perform other facilitating functions of marketing at a time. Wholesalers provide services to producers and retailers in different ways.
Functions Of Wholesalers
The main functions to be performed by wholesalers can be mentioned as follows:
The main functions to be performed by wholesalers can be mentioned as follows:
1. Bulk buying
Wholesalers buy bulk quantity goods of certain product lines from producers. They work as buying agents for customers. Besides identifying customers and their needs, wholesalers also become well informed of market and sources of supply. The customers know wholesalers as the representative of some limited producers of certain product lines.
2. Mass Selling
Another function of wholesalers is mass selling. Wholesalers work as sales-force for the producers. They deliver goods to retailers and industrial users at lower cost than the cost the producer would need if they directly delivered or supplied. Wholesalers help in mass selling of goods by supplying to several retailers living scattered in different places.
Wholesalers buy goods in bulk quantity from producers and resell in small quantity to retailers or industrial users. In the absence of wholesalers, the producers cannot sell their products to the retailers in bulk quantity on the one and the retailers cannot buy in bulk quantity to sell to the final consumers on the other. As a result, marketing gets paralyzed. So, the wholesalers serve both producers and retailers.
4. Transportation
As wholesalers buy goods in bulk quantity, they help producers and retailers minimize transportation cost. They provide fast delivery services to customers by which investment in overstock and risk is minimized. Wholesalers create place utility of goods by transporting them from one place to another with fast speed and skill.
5. Warehousing
Wholesalers perform an important job relating to physical distribution by warehousing and keeping store of goods. Along with this, they also create and increase time utility of goods by storing them and maintain proper balance between production and demand.
6. Financing
Financing is the other important function of wholesalers. They provide credit facility to retailers or they sell goods to retailers on credit. Doing so, they lessen the burden of the necessity of capital on the retailers. Generally, producers cannot provide credit facility to retailers.Wholesalers help producers by buying goods before peak season and making payment in time. In fact, wholesalers make arrangement of finance for the producers in the process of sales and distribution of goods.
7. Risk bearing
In the process of sales and distribution. wholesalers bear the risk caused by decline in demand, fluctuation in prices, consumers' interest, change in fashion and other factors, If wholesalers' services were not available, the producers themselves would have to store their goods. As a result, they would have to bear all the risks.
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8. Market information
Wholesalers also provide information about market situation, competitors' strategy and their market position, information about different goods in markets, customers and their needs and interest etc. They also provide information about new products , competitive activities, special sales programs of producers, price, market situation etc.
