Q2-What do you know about wholesaler. Discuss services of wholesalers to manufacturers.
Wholesalers are those middlemen who buy in bulk quantities and sell to retailers. They have no direct contact with the consumer. Whenever there are wholesaler in the channel there must be a retailer because they do not deal with the final consumers.
Services Of Wholesalers To Producers/ Manufacturers
Wholesalers provides valuable services to producers/ manufacturers. Some of them are as follows:
- Direct Link With Retailer:
The wholesaler has a direct contact with all type of retailer, big or small, and whether they are located in a small or big place. For producer it is not possible to have a link with all these types of retailers. In fact, wholesalers sit in markets that can be easily approached by retailers.
- Storage Facility:
Manufacturers produce goods in huge quantities so that they can justify their production expenses. Retailer cannot purchase in that bulk but wholesalers do. The wholesalers purchase in large quantities relieving manufacturers of their need for warehouses. Therefore, manufacturers don’t have to block their capital in the purchase of warehouses and sell large easily and fast.
- Financial Aid & Credit Burden:
Wholesalers provide financial help to producers. The method of help is to make advance payment with the order to the producer. Retailers usually purchase on credit, while the wholesalers purchase on cash.
- Market Information:
Wholesalers have link with the retailer who has direct contact with the public. Through retailers, the wholesaler gets fresh information about the market, competition, etc. which he passes on to manufacturers. These manufacturers, on the receipt of valuable information, adjust and update their production policies.
- Help In Selling/ Wider Distribution:
By the services of wholesalers, the producer is in a position to widely distribute his goods on the market. Selling to a hundred wholesalers has a much wider and more extensive distribution than selling to a hundred retailers. In dealing with wholesalers his much time is also saved.