Wholesalers purchase goods from manufactures and sell to the retailers. He buys goods in large quantities and sells them to the retailers in small quantities for resale to the industrial and commercial consumers. He does not sell the goods directly to the consumers. A wholesaler may be a sole trader, or a partnership firm or a company.
Functions of Wholesalers
Some of the important functions of wholesalers may be explained as under:
1. Assembling of Goods
The wholesaler collects different varieties of a product from different manufacturers. They store the products and sell to the retailers.
Thus, they offer an opportunity to the retailers to select from among a large varety of goods.
Wholesalers sort out different grades of products purchased either from a single manufacturer or from different manufacturers.
These grades are developed according to the quality, characteristics, and nature of products.
After sorting out the products, the wholesalers pack these products.
Different packaging may be prepared to meet the requirements of different consumers.
Goods are packed in the manner that they may attract the attention of consumers and it may be convenient for the retailers and consumer to handle them.
One of the important function of wholesalers is to store the goods in good condition until they are sold to the retailers.
The wholesalers have to arrange for proper storage of goods.
Transportation is also an important activity to be performed by wholesalers.
Wholesalers have to transport the goods from the place of production to their godowns or warehouses and then from their godowns or warehouses and then from their godowns or warehouse to the place of retailers.
For transporting goods, the wholesalers may use the facility of transportation Agencies or they may maintain their own vans for this purpose. 21 Advantages and Disadvantages of Chain or Multiple Stores.
The goods collected and stored by wholesalers are distributed to the retailers or manufacturer or consumers.
Actually speaking, the distribution of goods is the ultimate object of wholesalers.
Wholesalers are a vital link between manufacturers and retailers. They finance te manufacturers and retailers. They finance the manufacturers as well as retailers.
They purchase the goods from manufactures on cash payment and sell these goods to the retailers on credit payment.
Wholesalers deposit some amount is security also with the manufacturers
8. Helpful in Price Determination
Wholesalers help the manufacturers in determining the price of their product.
Wholesalers, being in close touch with retailers, understand the situation and condition of the market and on the basis of such understanding, they help to manufactures in determining the price for their products.
9. Market Surveys
Wholesalers conduct market Surveys also with respect to a demand for a product.
10. Risk Bearing
Wholesalers bear the risk of both the manufacturers and retailers. Purchase goods in large quantities from manufacturers and thus minimize the risk of manufactures. They store these goods until these are sold to the retailers.
Thus, they bear the risk of changes in demands, needs, and wants of consumers.
They also bear the risk of fall in prices. In addition to this, they sell these goods to the retailers on credit and bear this risk also. 19 Role And Importance Of Managerial Economics (Step-by-Step).
11. Midway Role
The wholesaler is marketing middleman who occupies a position Midway between retailer and the producer or manufacturer.