WHOLESALE TRADE.

Hey Guys, Happy Friday. It’s a New Day to learn and have FUN doing so. Let’s get straight to the point at hand.

Wholesaling is a business activity which involves buying of goods and services from the producer in bulk, and selling in small quantities to the retailers and other merchants. In other words, A Wholesaler is a trader who buys goods in large quantity and sells in small quantity to retailers.

FUNCTIONS OF THE WHOLESALER TO THE PRODUCER:

1. The Wholesaler purchases goods in large quantities and sell in small quantity to the retailer.

2. He makes spaces available for further production by buying and clearing the goods from the producer’s warehouse and storing them in his own warehouse (This is especially when the Producer has limited space in his warehouse).

3. He makes money available to the manufacturer by buying goods and paying promptly.

4. He keeps the manufacturer informed about the market situation from information he gathered from retailers and consumers.

5. He relieves the manufacturer from the problem of transportation and distribution of goods.

FUNCTIONS OF THE WHOLESALER TO THE RETAILER:

1. He advises the Retailer.

2. He offers Credit Facilities to the Retailer.

3. He sells goods in small quantity to the retailer.

4. He introduces a New Products to the Retailer, because he (The Wholesaler) is closer to the Retailer.

5. He offers the retailer variety of choices by stocking wide range of goods in his warehouse.

CHANNELS OF DISTRIBUTION

The channel is a path through which goods move from the producer to the consumers. It is the path through which the ownership of products is transferred as it moves from the producer to the consumers. In other words, it is the journey goods and services take in order to get to the final consumer.

MIDDLE MEN:

The Middlemen are the Wholesalers and the Retailers who are in between the Manufacturer and the Consumers in the chain of distribution and production of goods.

CHANNELS OF DISTRIBUTION FOR CONSUMER GOODS:

a. Producer------------------------------------------------------------------ Consumer.

b. Producer---------- Wholesaler----------- Retailer----------- Consumer.

c. Producer-------------------------- Retailer-------------------------- Consumer.

d. Producer------------------------ Wholesaler---------------------- Consumer.

e. Producer------------- Agent------------- Retailer--------------- Consumer.

f. Producer---- Agent----- Wholesaler------ Retailer------- Consumer.

g. Producer-------------------------- Agent------------------------------ Consumer.

FACTORS TO BE CONSIDERED BEFORE CHOOSING A PARTICULAR CHANNEL.

1. If the number of potential buyers are small, the producer will use a shorter channel but if they are large, the producer will use all middlemen involved.

2. If the customers are scattered, the longer channel will be used, but if they together the shorter channel will be used.

3. If the users buy in large quantity, the producer will by-pass most of the middle men and sell directly.

4. A Producer who is financially capable can use his own salesmen or open his own retail outlet and therefore use shorter channel and vice versa for a Producer who isn’t financially capable.

IS WHOLESALE TO BE ELIMINATED FROM THE CHAIN OF DISTRIBUTION?

The Wholesaler is not to be eliminated from the chain of distribution because they always serve as a middleman between the Producer and the Retailers. They also help the Manufacturers to store some of their products in their (The Wholesaler’s) Warehouse in order to create space to produce more.

If they are eliminated they will be no one to buy in large quantities from the Producer, They also act as advertisers of the products of the Manufacturer and inform the Manufacturer of the condition of the Market.

The Retailers cannot carry the responsibility of the wholesaler because they buy in small quantities. So to this end Wholesalers shouldn’t be eliminated.

This concludes our session for today, Hope you had fun and understood what we talked about today. For your questions send them to dividiamond@gmail.com. Until we meet again, remain ever Blessed and remember you are for SIGNS & WONDERS.