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Functions of the Wholesaler

13 May, 2016 - 13:23

Wholesalers perform a number of useful functions within the channel of distributions. These may include all or some combination of the following:

  • Warehousing—the receiving, storage, packaging, and the like necessary to maintain a stock of goods for the customers they service.
  • Inventory control and order processing—keeping track of the physical inventory, managing its composition and level, and processing transactions to insure a smooth flow of merchandise from producers to buyers and payment back to the producers.
  • Transportation—arranging the physical movement of merchandise.
  • Information—supplying information about markets to producers and information about products and suppliers to buyers.
  • Selling—personal contact with buyers to sell products and service.

In addition, the wholesaler must perform ail the activities necessary for the operation of any other business such as planning, financing, and developing a marketing mix. The five functions listed previously emphasize the nature of wholesaling as a link between the producer and the organizational buyer.

By providing this linkage, wholesalers assist both the producer and the buyer. From the buyer's perspective, the wholesaler typically brings together a wide assortment of products and lessens the need to deal directly with a large number of producers. This makes the buying task much more convenient. A hardware store with thousands of items from hundreds of different producers may find it more efficient to deal with a smaller number of wholesalers. The wholesaler may also have an inventory in the local market, thus speeding delivery and improving service. The wholesaler assists the producer by making products more accessible to buyers. They provide the producer with wide market coverage information about local market trends in an efficient manner. Wholesalers may also help with the promotion of a producer's products to a local or regional market via advertising or a sales force to call on organizational buyers.