Wholesale trade or Wholesaling: Wholesaling is a business activity which entails buying of goods in bulk from the producer and selling in small quantities to the retailers and other merchants.
A WHOLESALER is a merchant () who purchases goods in large quantity from the manufacturer and sell in small quantities to the retailers. Wholesaling activities are essential in the channel of distribution.
CHARACTERISTICS OF A WHOLESALER
There are three main characteristics of a wholesaler. These are:
BREAKING OF BULK: The wholesaler purchases goods in bulk or large quantity from the manufacturers.
SELLS IN SMALL QUANTITIES TO THE RETAILERS: The wholesaler do sell the goods he purchased from manufacturers to the retailers in small quantities.
ACTS AS MIDDLEMAN: The wholesaler acts as middleman between the manufactures and the retailers.
CHANNELS OF DISTRIBUTION
The channel is a pathway through which goods move from the producer to the consumers. It is the path through which the ownership of products is transferred as it moves from the producer to customers.
MIDDLEMEN: The middlemen are the wholesalers and retailers who specialize in performing activities relating to the purchase and sale of goods in the process of their flow from producer to final buyers.
DIFFERENT CHANNELS OF DISTRIBUTION
A – Producer ————————————————————————————————-Final Consumer
B – Producer————————Agent————————-Retailer——————————-Final Consumer
C – Producer————————————–Wholesaler———————————————Final Consumer
D – Producer———————Wholesaler———————-Retailer——————————-Final Consumer
E- Producer—————–Agent————–Wholesaler—————Retailer———————Final Consumer
F – Producer———————————————-Agent———————————————–Final Consumer
G – Producer—————————————-Retailer————————————————–Final Consumer
DIFFFERENCES IN FUNCTION BETWEEN THE WHOLESALER AND RETAILER IN THE DISTRIBUTION OF COMMODITY
The wholesaler buys in large quantities from the manufacturer and sells in small quantities to the retailer.
The retailers buys in smaller quantities from the wholesaler and sell in bits to final consumers.
The wholesaler requires a large space (warehouse) to store his goods.
The retailers requires small space (store) to display his wares or goods.
The wholesaler stocks limited varieties goods in his warehouse.
The retailer stocks several varieties of goods in his shop making it possible for consumers to make choices.
The wholesaler acts as an intermediary between the retailer and the manufacturer.
The retailer acts as an intermediary between the wholesaler and the final consumers.
The wholesaler interacts freely with the manufacturer.
The retailer relates freely with the final consumer.
The wholesaler may travel long distance to buy goods from the manufacturer.
The retailer mostly buys his good from the wholesaler within the vicinity.
The wholesaler finances the manufacturer.
The retailer receives credit facilities from the wholesaler.
The wholesaler grades, blends and repacks the goods.
The retailer does not grade, blend and repack his goods.
The wholesaler spends more money on a particular product.
The retailer spends lesser amount on a variety of products.
The wholesaler provides useful information about the goods to the manufacturer.
The retailer provides useful information to the wholesaler concerning market situations of his products.
From Ms Kehinde Alebiosu.