Wholesaling Functions
Why use wholesalers at all? In general, wholesalers can more efficiently perform one or more of the following functions:
- • Selling and promoting. Wholesalers’ sales forces help manufacturers reach many small business customers at a relatively low cost.
- • Buying and assortment building. Wholesalers are able to select items and build the assortments their customers need.
- • Bulk breaking. Wholesalers achieve savings for customers by buying large carload lots and breaking the bulk into smaller units.
- • Warehousing. Wholesalers hold inventories, thereby reducing inventory costs and risks to suppliers and customers.
- • Transportation. Wholesalers can often provide quicker delivery to buyers because they are closer to the buyers.
- • Financing. Wholesalers finance customers by granting credit and finance suppliers by ordering early and paying bills on time.
- • Risk bearing. Wholesalers absorb some risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence.
- • Market information. Wholesalers supply information to suppliers and customers regarding competitors’ activities, new products, price developments, and so on.
- • Management services and counseling. Wholesalers often help retailers improve their operations by training sales clerks, helping with store layouts and displays, and setting up accounting and inventory-control systems.
