Meaning of Wholesellers and Services

Meaning of 'Wholesellers'

In the task of supplying the products from the producers to the consumers, the wholesellers play an important role. The wholesellers extend much valuable information to the retailers and the producers (manufacturers).

By the wholeseller is meant such trader who, by purchasing goods from the manufacturers in bulk quantities, sells the goods in small quantities to the retail traders as per their needs. Some of the common definitions of 'wholeseller' are being given hereunder:

In the opinion of Larson, among the wholesellers are included all such agencies which share the purchase-sale transactions taking place in the local market and retail traders.

The Census Bureau of America has expressed that all the businessmen, representatives and all, those gatherers who intervene, among the producers and the retail traders and consumers intervene, are known as the wholesellers.

Services Rendered by the Wholesellers

The following is the description of the services being rendered by the wholesellers:

       I.            Services to the Producers/Manufacturers

(1)   Providing Financial Help. Mostly, while placing orders with the manufacturers, the wholesellers also remit some money (amount) as advance. Due to receiving this advance money, the manufacturers find it convenient and helpful to keep their production activity continued.

(2)   Providing the Market Reports. The wholesellers provide to the manufacturers the information regarding changed tastes and fashions of the masses so that the production of the goods could be adjusted accordingly. Really, the wholesellers supply all the related market reports to the producers.

(3)   Creating Demand for the New Products. The wholesellers create the demand for the products, newly manufactured by the manufacturers.

(4)   Relief to Producers against Storing Risks. The whole-sellers purchase the products in bulk quantities from the manufacturers due to which the producers are not required to maintain the stocks of the products. Really, due to the wholesellers, the producers' are not required to face any risk regarding the storing of the goods.

(5)   Advertisements. Many wholesellers undertake to advertise various products of the manufacturers which save the advertisement expenses to them.

(6)   Relief against Risks of Goods Distribution. The wholesellers, by purchasing bulk supply of the goods from the manufacturers, keep on selling it in small lots to the retailers due to which the manufacturers are not required to maintain any separate sales organization. The manufacturers are saved of all the problems pertaining to the distribution of the goods.

(7)   Standardization of Goods. The wholesellers also undertake the standardization or gradation of the manufacturers' produce:

(8)   Making Large-Scale Production Possible. The manufacturers get big orders from the wholesellers which encourage the large-scale production. If there were no wholesellers, the manufacturers would have been required to procure themselves the petty orders from retailers.

(9)   Serving the Purpose of Intermediaries. The wholesellers also act as intermediaries between the producers and the retailers.

(10)  Extending Facility of Raw Materials, Etc. Some wholesellers also make the raw materials available from time to time to the manufacturers.

    II.            Services to the Retailers

(1)     Making the Products from Various Producers Available. The wholesellers preserve the products from various manufacturers so that the retailers don't stand in need of establishing contacts with various manufacturers. In absence of the wholesellers, the trouble to the retailers increases. If the retailers were required to establish contacts with the manufacturers, it would have led to the waste of their precious time and money.

(2)     Providing Credit Facilities. Since the financial position of the retailer is not very much sound, hence he continues purchasing, in small lots, the goods from the wholesellers. By providing the credit facilities, the wholesellers extend the indirect financial help to the retailers. The retailer procures the products from the manufacturer on credit and gradually selling the goods, goes on paying the amounts to the wholeseller in small installments. The retailers get so much of the credit facilities that they are not required to invest additional capital in the business.

(3)     Extending Facility of Selection of-Products. The wholesellers extend full facility to the retailers for the selection or choice of the products.

(4)     Providing Information Regarding Newly-Manufactured Products. The wholesellers provide information to the retailers with regard to the various newly-manufactured goods. If there were no wholesellers, the retailers won't have been able to get the correct information regarding the new products available in the market.

(5)     Supplying Product on Reasonable Price. Since the wholesellers purchase products from the manufacturers in large quantities, hence they possess the capacity of supplying the goods to the retailers on reasonable price.

(6)     Providing Facility of Gradation and Packing of the Products. The wholesellers, by providing the futility of good packing and gradation, to the retailers, supply the products while they purchase from the manufacturers the unpacked products from the producers. The retailer is not required to undertake the grading and packing function, but lie is required to undertake only the selling activity of the products.

(7)     Extending the Suggestions. The wholesellers extend to the retailers valuable advice in connection with the salesmanship, publicity and various other matters. On the basis of these suggestions the retailers are able to extend their business sufficiently.

(8)     Relieving Against the Strong Risks. From the wholesellers, the retailers may purchase the products in small lots as per their requirements. Hence, the retailer is relieved of the storing risks of the goods. Due to the valuable services available from the wholesellers, the retailers are not required unnecessarily to keep large stocks of products.

(9)     Relief against Risks of Price-Fluctuations. Due to the wholesellers, the retailers are not required to face the risks of the fluctuations in the prices. They are not required to face these risks also for the reason that they don't possess large stocks of the products with them.

(10)  Extending the Publicity Facility. The wholesellers undertake the advertisements of the goods on a large scale which adds to the existing demands of the products and its benefit is availed by the retailers. Really, due to the wholesellers, there is sufficient economy in the advertisement expenses of the retailers.

 III.            Services to the Society

(1)   Providing Information Regarding Newly-Manufactured Products. Due to the wholesellers, the masses get information about the new products manufactured by the producers. In other words, it might be said that the wholesellers, by arranging the supplies from the various producers, arrange to make these things available to the consumers through the medium of retailers.

(2)   Uniform Prices Everywhere. Since the wholesellers sell the products to all the retailers on the same uniform price, hence, the retailers charge the same uniform price from the public everywhere.

(3)   Procuring the Products as Per Taste. The wholesellers, through the medium of the retailers acquire the knowledge regarding the interests and fashions of the public and get the products manufactured by the producers accordingly. Besides, the wholesellers also keep in stock the products from various manufacturers.

(4)   Undertaking Market Research. The wholesellers, by taking up the market research and by it know the desires, likings and the fashions of the masses, and accordingly suggest to the manufacturers to produce the things, the benefit of which is available to the society.

(5)   Specialization. Since the wholesellers encourage the specialization by making .bulk purchases of the products, hence society gets good products on lower prices.

(6)   Maintaining the Balance between Demand and Supply. The wholesellers, by striking equilibrium between the demand and supply, try to maintain the stability in the prices of the products.