Wholesaler and Retailer

The Wholesaler

The wholesaler is a middleman who purchases in bulk from the manufacturer and sells in small quantities to the retailer. The wholesaler is essential in the channel of distribution.

Role of the Wholesaler

The wholesaler plays a major role to the manufacturer, the retailer and the consumer.

1. Role of the Wholesaler to the Manufacturer

• Bulk Breaking: Wholesalers buy in large order from manufacturers.
• Risk Bearing: Wholesaler bears the risk of fall in price since he buys in bulk and stores in the warehouse.
• Provision of Warehouse Facilities: He buys in large order and stores them until customers come for them.
• Price Stability: He stabilizes the price buy buying now and sell in the future at relatively stable price.
• Branding and Packaging: Wholesaler helps manufacturer to brand and package their goods before selling to retailers or consumers.
• Transportation: Wholesaler provides transportation services for manufacturer by taking the goods to market.
• Keeping Manufacturer Informed: Wholesaler gives manufacturer feedback about the goods.
• Financing Production: Wholesaler finances manufacturer by making advance payment to him.
• Advertising and Marketing: Wholesaler advertises the goods produced by manufacturer.

2. Role of the Wholesaler to the Retailer

• Provision of variety of goods: Wholesaler stores different kinds of goods in their warehouse for retailer to purchase.
• Provision of credit Facility: He sells on credit to retailers
• Price Stability: He sells to the retailers at a relatively stable price even when the cost of production has increased because he must have stored the goods.
• Grading and packaging: He sells graded and packaged goods to retailers.
• Transportation: – Wholesalers help retailers who are regular customers to carry their goods to their stores with their van.
• Advising the retailer: Wholesaler advises retailer about the usage of the products and the precautions to take while using the products in order to feed the consumer.
• Advertising the Product: Wholesaler advertises the products.

3. Role of the Wholesaler to the Consumer

• Variety of Goods
• Price Stability

The Retailer

The retailer is a vital link in the distributive process. He buys goods from wholesaler and in some cases, directly from the manufacturer and sells to the consumers. As a merchant, he buys in small quantities and sells in smaller units. He puts the goods in the hands of the consumer and thus completes the production process. He works towards marketing the available goods in the right place at the right time.

Role of the Retailer

1. Selling in Small Quantities: Retailer sells in small quantities to consumers
2. Availability of Variety of goods: He sell various commodities to consumers at the same time.
3. Selling at Convenient Time and place: He sells at the time that is convenient to consumers.
4. Selling in Credit: Consumers can buy and make payment in the future.
5. Informing the Wholesaler and Producers: He brings the complaints of the consumers to wholesalers and producers.
6. Provision of after sales services: He provides after sale services like warranty, installation, etc to consumers.
7. Advising the Consumer: He advises the consumers about the goods in the area of usage and precaution.
8. Weighing, Measuring and packaging: He repackages and weighs the goods in such a way that consumers can easily buy in unit.

EVALUATION (POST YOUR ANSWER IN THE COMMENT BOX BELOW FOR EVALUATION AND DISCUSSION)

1. List five qualities of money.
2. Explain the relatively scarcity characteristic of money in relation to its being in controllable supply.
3. Who is a Retailer? What roles does he play in the channel of distribution?
4. List five roles of wholesaler to retailer.