Middlemen are very important in many cases, in fact, in virtually all cases where consumers are involved. Usually, it is simple but not practical for a producer to deal directly with ultimate consumers. For example, think for a moment how inconvenient it would be if there were no retail middlemen – no drug stores, newspaper/vendors, supermarkets or fuel stations, hawkers, etc
There is an old saying in marketing that you can eliminate the middlemen, but not their functions. Wholesalers are those merchants who act as intermediaries between the primary producers, manufacturers or importers, on one side, and retailers or industrial consumers on the other. They buy goods and commodities in large quantities with a view to selling them to retailers in smaller quantities. They assemble merchandise from many sources warehouses and regroup the goods for convenient buying by end users. Thus, wholesalers make it possible for
the manufacturers to sell to a large number of retailers to whom the merchandise cannot be easily sold directly from the factory. The wholesalers perform the following functions of marketing:
• Assembling – The wholesalers collect varieties of products from different manufacturers and keep them in store for sale to the retailers at the time they need them.
• Dispersion – The products assembled and stocked by the wholesalers are supplied to the retailers who may be widely scattered.
• Warehousing – The goods purchased by the wholesalers from the manufacturers and producers have to be stocked in warehouses pending their sale to the retailers. The arrangement for such storage is the responsibility of the wholesalers.
• Transportation – The wholesalers have to move the goods from the various factories to their own warehouses and from there to the retailers’ stores.
• Financing – The wholesalers in most cases sell goods on credit to the retailers.
There is an old saying in marketing that you can eliminate the middlemen, but not their functions. Wholesalers are those merchants who act as intermediaries between the primary producers, manufacturers or importers, on one side, and retailers or industrial consumers on the other. They buy goods and commodities in large quantities with a view to selling them to retailers in smaller quantities. They assemble merchandise from many sources warehouses and regroup the goods for convenient buying by end users. Thus, wholesalers make it possible for
the manufacturers to sell to a large number of retailers to whom the merchandise cannot be easily sold directly from the factory. The wholesalers perform the following functions of marketing:
• Assembling – The wholesalers collect varieties of products from different manufacturers and keep them in store for sale to the retailers at the time they need them.
• Dispersion – The products assembled and stocked by the wholesalers are supplied to the retailers who may be widely scattered.
• Warehousing – The goods purchased by the wholesalers from the manufacturers and producers have to be stocked in warehouses pending their sale to the retailers. The arrangement for such storage is the responsibility of the wholesalers.
• Transportation – The wholesalers have to move the goods from the various factories to their own warehouses and from there to the retailers’ stores.
• Financing – The wholesalers in most cases sell goods on credit to the retailers.
Risk Assuming – Wholesalers assume risks arising out of the
• changes in prices and demand and as well as losses due to spoilage or destruction of goods in their warehouses and while in transit.
• The Manufacturers Get the Benefit of Bulk Orders from Wholesalers. Manufacturers need not take the trouble or incur the expenses of procuring large numbers of small orders.
• Wholesalers Provide Up-to-Date Information for Future Planning. Wholesalers remain in close touch with the retailers and keep themselves informed about the changes in the direction and pattern of demand and thus help the manufacturers in planning their production.
• Wholesalers Place Bulk Orders. The wholesalers place bulk orders with the manufacturer and thus enable him to concentrate on production.
• Grading and Packaging – Wholesalers have to sort out different grades of products according to quality and other considerations and package the goods into smaller lots for retailers.
Services provided to the manufacturers by wholesalers include:
• The Manufacturers Get the Benefit of Bulk Orders from Wholesalers. Manufacturers need not take the trouble or incur the expenses of procuring large numbers of small orders.
• Wholesalers Provide Up-to-Date Information for Future Planning. Wholesalers remain in close touch with the retailers and keep themselves informed about the changes in the direction and pattern of demand and thus help the manufacturers in planning their production.
• Wholesalers Place Bulk Orders. The wholesalers place bulk orders with the manufacturer and thus enable him to concentrate on production.
• Wholesalers Relieve the Manufacturers: The manufacturers are relieved of worries by wholesalers through performance of most marketing functions as discussed in unit one.
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