WHOLESALING

DEFINITON

1. Wholesaling includes all activities

required to market goods and
services to businesses, institutions,
or industrial users who are motivated
to buy for resale or to produce and
market other products and services.
 CHARACTERISTICS
1.Wholesalers buy goods directly from
producers or manufacturers.

2.Wholesalers buy goods in large quantities

and sells in relatively smaller quantities.

3.They sell different varieties of a particular

line of product. For example, a wholesaler
who deals with paper is expected to keep
all varieties of paper, cardboard, card, etc.
 CHARACTERISTICS
4.They may employ a number of agents or workers
for distribution of products.

5.Wholesalers need large amount of capital to be

invested in his business.

6.They generally provides credit facility to retailers.

7.He also provides financial assistance to the

producers or manufacturers.

8. Normally located at a particular area in cities or

town.
 IMPORTANCE
a) Linkage between producer & consumer
b) Provide wide assotment of products
c) Efficient Inventory management
d) Speeding delivery
e) Improves servicing
f) Provides wide market coverage
g) Tool for marketing information
h) Promotes the products or services
 FUNCTIONS
a) Collection of goods

b) Storage of goods

c) Distribution

d) Financing

e) Risk taking

f) Information supplying
 TYPES OF MODERN WHOLESALERS

a) Full-service merchandise wholesaler

b) Limited-service merchant wholesalers
c) Agens & Brokers
d) Manufacturer's sales
e) Facilitator
 TYPES OF MODERN WHOLESALERS
a) Full-service merchandise wholesaler :
Take title to the merchandise and assume the risk
involved in an independent operation; buy and resell
products; offer a complete range of services.
a) General Merchandise: wide mix(unrelted),
limited depth.
b) Limited Line: only few pdts but an extensive
assortment
c) Speciality Line: narrowest range of products
d) Rack Jobber: are specially line that own and
maintain display racks, take back unsold
products.
 TYPES OF MODERN WHOLESALERS
b) Limited-service merchandise wholesaler :
Take title to th e merchandise and assume the risk
involved in an independent operation; buy and resell
products; offer a limited range of services.
a) Cash & Carry: Customers pay and furnish their
own transportation, No credit.
b) Truck wholesaler: opearte rolling warehouses
and sell a limited line of products from their
tructs.
c) Drop Shippers (desk Jobbers): take title,
negotiate sales but do not take possession.
d) Mail Order: Use catalogues instead of sales force
to sell
 TYPES OF MODERN WHOLESALERS
C) Agents and Brokers:
Do not take title to the merchandise; bring buyers and
sellers together and negotiate the terms of the
transaction.
a) Agents (Permanent basis)
1. Buying Agents
2. Selling Agents
3. Commission Merchants
4. Manufacturer's agent
b) Brokers(temporary basis)
1. Real estate
2. Other products
 TYPES OF MODERN WHOLESALERS
D) Manufacturer's sales wholesaler: Owned
directly by the manufacturers; performs
wholesaling functions for the manufacturer.
E) Facilitator: Perform some specialized
functions such as finance or warehousing; to
facilitate the wholesale transactions; may be
independent or owned by producer or buyer.
1. Warehouses
2. Finance Companies
3. Transportation Companies
4. Trade Marts
DIFFERENCE BETWEEN WHOLESALERS & RETAILER

WHOLESALER RETAILER

Buys goods in large Buys goods in small

quantities. quantities.

Buys goods directly from Generally buys goods from

producers. the wholesalers.

Deals with limited variety Deals with wide range of

of goods. products.

Requires more capital to Requires less capital to

start start and run the business.
DIFFERENCE BETWEEN WHOLESALERS & RETAILER

WHOLESALER RETAILER
Sell goods for resale Sell goods for
purpose. consumption.
No direct contact with Direct contact with
consumers. consumer.

In order to attract the

attention of customers
No special attention is
retailers give more
given to decoration of shop
attention to decoration of
shop
 SELECTING WHOLESALERS

Wholesalers are selected on the basis of the

following questions:
How can a wholesaler serve a supplier?

How can a wholesaler serve retailers?

How can a wholesaler serve business users?

 STRATEGIC MANAGEMENT OF
WHOLESALERS
Success if a wholesaler firm depends upon the
following major factors:
a)Effectiveness
b)Profitability through value addition
c)Niche Marketing
d)Proprietary Brands and
e)New Technology
 STRATEGIC MANAGEMENT OF
WHOLESALERS

a) Effectiveness: Effectiveness of a wholesaler

depends upon:

a) Identifying target market needs

b) Develop a product mix to satisfy those needs
c) Adjusting the product mix which changes in
target market
 STRATEGIC MANAGEMENT OF
WHOLESALERS

B) Profitability:

a) Managing net profit margins and

b) Achieving high rates of assets turnover

 STRATEGIC MANAGEMENT OF
WHOLESALERS

C) Niche marketing:

Specialize in limited or unique categories

D) Proprietary brands

E) New Technology
 CRITERIA
FOR WHOLESALE
MARKET
 CRITERIA FOR WHOLESALE MARKET
1. Financial viability of the market reflecting
confidence and trust in its use, acceptance of
its fees and charges and rules by wholesalers,
farmers, retail and other buyers and users.
2. Operational efficiency, including:
• efficient handling of the arrival, unloading and
loading of produce; discipline in the market in
the internal movement, storage and display of
produce, which is achieved through enforceable
tenancy agreements, and widely accepted and
implemented market regulations or rules;
 CRITERIA FOR WHOLESALE MARKET
• traffic control and vehicle parking;
• personal safety;
• produce security;
• cleanliness and hygiene;
• effective provision of services, such as loading
and unloading services, produce movement,
electricity, garbage collection, telephone, fax, e-
mail, and internal communications, warehousing
and cold storage.
 CRITERIA FOR WHOLESALE MARKET
3. A pleasant and safe trading and working
environment in which private trading can operate
profitably. Such an environment should have toilet,
food and refreshment facilities, and other service
facilities such as banks, accountants, input
suppliers (e.g. packaging materials, seeds and
fertilizers for farmers), parking, and food and
accommodation facilities for transport operators.
 CRITERIA FOR WHOLESALE MARKET
• 4. The extent to which the market meets general
community needs by ensuring:
• a regular supply of goods in the necessary
quantities and quality;
• transparency in price setting through free
competition between traders;
• that standards and grades are adhered to,
where relevant;
• that packaging meets the needs of the market
and of the eventual consumers.
 CRITERIA FOR WHOLESALE MARKET
• 4. The extent to which the market meets general
community needs by ensuring:
• a regular supply of goods in the necessary
quantities and quality;
• transparency in price setting through free
competition between traders;
• that standards and grades are adhered to,
where relevant;
• that packaging meets the needs of the market
and of the eventual consumers.