WHOLESALE TRADE
Hey Everyone, Hows this New Monday
Morning to you, isn't is beautiful and full of promises and answered prayers.
LOLZ, Yes it is. Well Let's get straight to out topic for today.
WHOLESALING is a business activity which involves buying of goods
in bulk from the Producer and selling in small quantities to the Retailers as
well as other merchants. Wholesaling is included in the Channel of
Distribution.
FUNCTIONS OF THE WHOLESALER TO THE
PRODUCER:
a. The Wholesaler purchases Goods
in Large Quantity From the Producer.
b. He makes Space Available for
further Production by Buying and Clearing the goods from the Producer's
Warehouse.
c. In a Situation where the
Producer doesn't have a Warehouse, He offers to have the Manufactured Goods
moved to his own warehouse to enable more Production by the
Manufacturer/Producer.
d. He keeps the Producer informed
of the Market Situation from information he gathered from the Retailers,
Consumers and Middlemen.
e. He pays the Producer promptly
for his Goods in order not to slow down further Production.
FUNCTIONS OF THE WHOLESALER TO THE
RETAILER:
a. He advises the Retailer on the
Goods to buy and the ones not to buy.
b. He offers Credit facilities that
is , allowing the Retailer take goods on Credit from him to pay later.
d. He introduces New Products to
the Retailer, since he is closer to the Manufacturer.
e. He offers the Retailer, a wide
variety and range of goods from his warehouse stock.
CHANNELS OF DISTRIBUTION
The Channel is a path through which
goods move from the Producer to the Final Consumer. It is also the path through
which the ownership of a product is transferred as it moves from the producers
to the Final Consumers.
MIDDLE MEN: They are the wholesalers and Retailers and any other
Merchant that are between the Producer and the Final Consumer in the Chain of
Distribution and the Production of Goods.
CHANNELS OF DISTRIBUTION FOR CONSUMER GOODS
Producer<-----------------> Consumer
Producer<------->Wholesaler<--------->Retailer<-------->Consumer
Producer<------->Retailer<--------->Consumer
Producer<-------->Wholesaler<-------->Consumer
Producer<------->Agent<---------->Retailer<--------->Consumer
Producer<------->Agent<------->Wholesaler<-------->Retailer<------------>Consumer
Producer<----------->Agent<-------------->Consumer
FACTORS TO BE CONSIDERED BEFORE CHOOSING A PARTICULAR CHANNEL
a. If the number of potential
buyers are small, the producers will use a shorter channel, but if they are
large; the producer will use all the middle men included.
b. If the Customers are scattered,
the longer channel will be used, but if they are clustered in an area; then a
shorter channel will be used.
c. If the Customers buy in large
quantity, the producers will by-pass most of the middle men and sell directly.
d. A Producer who is financially
capable, can use his own sales men or open his own retail outlet, and therefore
use a shorter channel.
TYPES OF WHOLESALERS
Wholesalers can be classified into
two broad categories namely:
a. Merchant Wholesalers
b. Agent Middle men.
QUESTION: Is the Wholesaler to be Eliminated from the Chain of
Distribution?
ANSWER: The Wholesaler is not to be eliminated from the Chain
of Distribution because, they always serve as a middle man between the Producer
and the Retailer. They also help the Manufacturer to store some of his goods in
their warehouse to encourage and enable further production.
If they are eliminated, there will
be no one to buy in large quantity from the Producer. They also act as
Advertisers of the Products of the Manufacturers and they inform the
manufacturers of the situation in the market.
The Retailers cannot carry the
responsibilities of the Wholesalers because, they buy in small quantities, so
to this end I think that the Wholesalers cannot be Eliminated.
This brings us to the end of Today's Session. Hope this was
very helpful to you, leave a comment of what you think of this Tutorial and of
your Questions below. Have a Blessed Day and Remember You are Amazing. God
Bless You.
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