Chapter – 10
Wholesale Trade
DEFINITION
Generally speaking trade may be carried on either on
retail or wholesales basis. When the goods are purchase in a large quantity by
a person to be sold in smaller quantities to retailers it is known as wholesale
trade. It may be defined as follow.
“ A wholesale
transaction is one in which the purchaser dose no buy for his own private or
personnel use but is guided by a profit or business motive ib the making of
purchase.”
The wholesaler has following characteristics:
1. He deals in a larger quantity of goods which are being
purchased from the manufacturer.
2. His business is specialized
3. He sells goods to retailers.
Thus the wholesalers are said to be marketing institution who buy goods and then resell them. They are neither the manufacturers themselves nor the retailers but acts as a link between them.
2. His business is specialized
3. He sells goods to retailers.
Thus the wholesalers are said to be marketing institution who buy goods and then resell them. They are neither the manufacturers themselves nor the retailers but acts as a link between them.
SERVICE OF WHOLESALER TO MANUFACTURERS
The wholesaler render very valuable and important services
to the manufacturer which are as follow.
1. By buying in large quantities the wholesaler enables
the manufacturer to benefit from the economies of lager scale production. So
the wholesaler grants financial assistance to producers.
2. A manufacturer is not expected to be expert seller. He
is an expert technician and must pay all hs attention to production. The
wholesaler enables him to do this by taking upon his shoulder the
responsibilities of distribution.
3. The wholesaler relieves the manufacturer of the
necessity for carrying larger stock . thus enabling him either to release his
capital for future production or to carry on the business with less capital
then would otherwise be necessary.
4. The wholesaler direct the manufacturer as regards the
quality and quantity of the goods demanded, new market developments ,coming
trends etc as they are in direct contact with the retailer who know the market
conditions.
5. The wholesalers often enable the manufacturers to
minimize his total distribution cost eg. The manufacturer of consumer goods
would behave to establish and maintain an enouomus sales force in order to
reach all outlets in which he would like his product stocked.
6. The manufacturers are already short of funds and cannot
afford to allow credit to retailers, however the wholesalers can do so and
relieve the manufacturers from credit burden.
7. The wholesalers simplifies the marketing process and
makes fewer transactions necessary. A manufacturer deals only with a selected
number of wholesalers rather than hundreds and thousand of retailers.
SERVICE OF WHOLESALERS TO RETAILERS
The wholesalers render very useful services to retailers
which are as;
1. Supplying goods according to the demand: the retailers
due to smaller capital cannot hold a big stock of any commodity but he the
wholesaler by holding large stock of different varieties of goods enables the
retailers to make purchase in small quantities at interval and to carry on
business with less capital.
2. Facilitating choice of selection: a wholesaler hold
large stocks of different varieties of goods and thus enables the retailers to
exercise there choice and selection.
3.Credit facility: most wholesaler grant credit. This
reduces the capital requirements of the retailers and enable him to maintain
huge stocks of goods.
4. The stocks held by wholesalers enable the retailer to
obtain supplies more quickly than they can from manufacturer.
5. The wholesaler makes the retailers buying function
easier as he needs to deal only with a small number of wholesalers, rather than
hundreds of manufacturers.
6. He often enable a retailer to reduce his total buying
cost . they are often able to take advantages of volume discounts.
7. He regulates the price by controlling the supply and
thus minimize the risk of retailers.
8. Since they perform a storage service, therefore they
absorb a part of retailers storage burden. If the retailers were to buy direct
from the manufacturer they would have to store the goods themselves.
9. They provide suggestion to retailers in connection with
the store display,
selling technique, and maintenance of accounts etc.
10. The supply of goods in small quantity enables the
retailers in avoiding wastage.
Packing
Protecting goods from breakage, spoilage and leakage while they are being transported or stored is another important function of marketing process. Considerable efforts and research has been carried out in this fields as packing represents a vital and expensive activity.
Protecting goods from breakage, spoilage and leakage while they are being transported or stored is another important function of marketing process. Considerable efforts and research has been carried out in this fields as packing represents a vital and expensive activity.
Branding
It is applicable to all identifying marks by which a manufacturer or wholesaler identifies his products. The brand enable the purchaser to know what he is buying.
It is applicable to all identifying marks by which a manufacturer or wholesaler identifies his products. The brand enable the purchaser to know what he is buying.
Recording
A considerable amount of recording is recording in order to know who made the purchase, the amount of investors. Therefore it is an important function.
A considerable amount of recording is recording in order to know who made the purchase, the amount of investors. Therefore it is an important function.
Sampling
In order to show goods to distant customers the producer has to adopt the prospect of sampling of the goods. It denoted the selection of apart of commodity from a bulk in such a way that it would be representative enough to render a correct idea about the commodity ti recipient of the sample.
In order to show goods to distant customers the producer has to adopt the prospect of sampling of the goods. It denoted the selection of apart of commodity from a bulk in such a way that it would be representative enough to render a correct idea about the commodity ti recipient of the sample.
Having Market
Information
It is important function and it is
extremely helpful to both the consumer and the manufacturer. As markets for
various articles are widening the importance of research and information in
increasing. Producers are made aware of coming trends because marketers inform
them of changes in consumers want supply and demand and the new market
development, position of the computers etc.
Salesmanship
The chief objective of this stage of marketing process is to bring a potential buyer into contact with the seller. Thus this is also an important marketing function.
The chief objective of this stage of marketing process is to bring a potential buyer into contact with the seller. Thus this is also an important marketing function.
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