Who is a wholesaler? What are the functions of a wholesaler? What are the services of a wholesaler?

Wholesalers:

A wholesaler is a trader who deals in large quantity. He purchases goods from the producers in bulk quantity and sells it to the retailers in small quantity. According to the American Management Association, “ wholesalers sell to retailers or other merchants and/or individual, institutional and commercial users but they do not sell in significant amounts to ultimate consumers.”

Functions of wholesalers

1. Assembling and buying: It means bringing together stocks of different manufactures producing the same line of goods, and making purchases in case of seasonal goods.

2. Warehousing: The warehousing function of the wholesalers relieves both the producers and the retailers from the problem of storage.

3. Transporting: In the process of assembling and warehousing, the wholesaler do undertake transportation of goods from producers to their warehouse and back to retailers

4. Financing: They grant credit on liberal terms to retailers and taking early delivery of stock from the manufacturers to reduce their financial burden.

5. Risk bearing: Wholesaler bears the risk of loss of change in price, deterioration of quality, pilferage, theft. Fire etc.

6. Grading, Packing, and packaging: By grading they sort out the stocks in terms of different size, quality shape and so on.

7. Dispersing and selling: Dispersing the goods already stored with them to the retailers.

8. Market information: Finally providing the market information to the manufactures

Services of wholesalers:

A. Services to Manufacturers:

1. The wholesaler helps the manufacturer to get the benefit of economies of large scale production.

2. Wholesalers help the manufactures to save his time and trouble by collecting orders from a large number of retailers on behalf of the manufactures.

3. The wholesaler provides market information to the manufactures which will help him to make modifications in his product.

4. The wholesaler buys in large quantities and keeps the goods in his warehouses. This relieves the manufacturer the risk of storage and obsolescence.

5. The wholesales helps to maintain a steady price for the product by buying the product when the prices are low and selling when the prices are high.

B. Services to Retailers:

1. He gives valuable advice to the retailers on his business-related matters.

2. He helps the retailer to get the goods very easily and quickly.

3. He renders financial assistance to the retailer by granting credit facilities.

4. The wholesalers bear the risk associated with storage and distribution of goods to a certain extent.

5. The wholesaler helps the retailers to keep the price steady.