The Functions of a Wholesale Merchant
Introduction:
A wholesale Merchant is the person who forms a link between producers and retailers. The wholesaler provides useful services to the public the most important of which is warehousing.
Neither manufacturers nor retailers are equipped to hold large stock, nor they want the expense and trouble of doing so. The wholesaler, on the contrary has large warehouses in which he stores the goods in such a way that they will not deteriorate or be stolen before they are bought by retailers. By warehousing the goods the wholesaler also bridges the time gap between production and consumption, leaving the manufacturer free to concentrate on his Specialise activities.
The wholesaler is able to anticipate what customers will be buying in the coming months. This means accepting the risk of being wrong. Buying ahead also provides a steady market for manufacturers.
Another function of the wholesaler is that of Finance. He help to Finance trade by buying from the manufacturers and so keeping their resources liquid, and by giving generous credits to retailers.
As an expert buyer, the wholesaler will try to buy when prices are low, storing goods until they are less plenty in the market and then sell to a profit. This will help even out out supplies through out the year.
In some trades the wholesaler grade sorts, packs, prepare and advertise the goods on behalf of the maker of the product.
Since the wholesaler is in touch with both retailers and manufacturers he is in an ideal position to pass back information about what products are selling and what criticism are being made.
Finally, the wholesaler holds a key positions in the delivery of goods or products.
The wholesaler is often blame for the big difference that may exist between factory price and the retail price. In some cases there may be too many of them some of whom take title of the goods but never see them at all. All these activities go to increase the final price of the product. This is one reason why there has been a tendency to cut them out by direct dealing between the maker and retailers or the maker opening his own retail shops. It seems elementary that if the wholesaler is cut out the honest producer and consumer must benefits; the producers reward will be greater and the consumer would get the goods more cheaply.
This, in actual fact, does not necessarily follow. Even if the wholesaler is cut out, his functions must still be performed by someone who is a non specialist. Some of the result of the non Specialist inefficiency will be the eventual increase in the cost of goods and poor distribution which will leave some parts of the community without supplies while others might have them in unnecessary large quantities.
The wholesaler is a Specialist and must be allowed to perform his functions.
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| The wholesaler van |
Who is a Wholesale Merchant?
A wholesale merchant is a business entity that buys goods or products in large quantities from manufacturers or other suppliers and then sells them in smaller quantities to retailers or other businesses. Wholesale merchants act as intermediaries in the supply chain, helping to distribute goods to a broader market. They often offer discounts to retailers who purchase in bulk, making it cost-effective for them to source products for resale.
5 functions of a wholesale Merchant
Wholesale merchants play a crucial role in the distribution and supply chain of various products. Here are five key functions they typically perform:
Procurement: Wholesale merchants source products from manufacturers, distributors, or other suppliers at bulk quantities. They negotiate prices and terms to secure cost-effective inventory.
Inventory Management: They maintain a large inventory of diverse products and manage stock levels to meet customer demand. This includes storage, tracking, and handling of goods.
Distribution: Wholesale merchants distribute products to retailers, businesses, or other wholesalers. They ensure timely and efficient delivery to customers, often using logistics and transportation services.
Pricing and Pricing Strategy: They establish pricing strategies that consider market conditions, competition, and the cost of goods. Wholesale pricing is typically designed to provide retailers with a margin for profit.
Customer Service: They provide support and assistance to their customers, helping them with product selection, order processing, and addressing any issues or concerns. Good customer service is essential for building long-term relationships.
These functions are essential for the smooth flow of goods from manufacturers to retailers, benefiting the entire supply chain.
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