Question

Explain the services of wholesalers.

Answer 1

Wholesaler provides services to:
(A) Manufacturers and (B) Retailers

(A) Services of Wholesalers to Manufacturers:

1. Finance Assistance: Wholesaler provides advances to the manufacturers, so they can do bulk production. Thus, manufacturers can maintain a continuous flow of production.
2. Collecting Order and Distribution of Goods: Wholesaler collects small orders of goods from the retailers then he collects the goods from the manufacturer and distributes it to retailers.
3. Large Purchase: Wholesaler purchases goods on large scale from the manufacturers and sells them to the retailers on behalf of the manufacturers.
4. Transportation: Wholesaler sometimes carries the transportation function of a manufacturer by himself. So cost and time of the manufacturer are saved.
5. Risk Bearing: He takes a risk of buying goods in big quantities and storing them. This may sometimes lead him to lose.
6. Provide Market Information: Wholesaler provides the latest information of market condition to the manufacturer. On the basis of this information, the manufacturer changes its production policies and regulates production activities.
7. Marketing Function: Wholesaler carries many marketing functions like warehousing, advertising, sales promotion, etc. on behalf of the manufacturer.
   (VIII) Storage: The wholesaler provides storage facilities for the products manufactured by the producers. This helps them to fill up the time gap between production and consumption of goods.

(B) Services of Wholesaler to Retailers:

1. Financial Support: Wholesaler provides credit facility, discount facility, and financial assistance to their retailers.
2. Market Information: Wholesaler provides market information to retailers as he has links with various manufacturers. This information is very useful to retailers for the purchase of goods.
3. Risk Bearing: Retailer holds limited stock of goods and avoids the risk of spoilage of goods. Retailers get protected from increase or decrease in prices of goods and fluctuation of demand.
4. Stock of Goods: Wholesaler stores the stock of goods for retailers, then retailer supply these goods to customers as per their demands.
5. Warehousing and Transport: Wholesaler provides the facility of storing of goods as well as transport facility to retailers. They also do home delivery of goods to retailers.
6. Regular Supply: Wholesaler assures the regular supply of goods to the retailers. The risk of shortage of goods and price fluctuation is reduced.
7. Sales Promotion: Wholesaler provides a promotional facility to the retailer. He advertises on behalf of retailers and this helps the retailers to increase sales.