A Person or firm that buys large quantity of goods from various producers or vendors, warehouses them, and resells to retailers. A wholesaler performs the following functions:
1. Assembling:A wholesaler buys goods from producers who are scattered far and wide and assembles them in his warehouse for the purpose of the retailers.
2. Storage:After arranging and assembling the products from producers, wholesaler stores them in his warehouse and releases them in proper and required quantities as and when they are required by retailers. Since there is always a time-lag between production and consumption, therefore, the manufactured goods are to be stored carefully till they are demanded by retailers. Thus, a wholesaler performs the storage function in order to save the goods from deterioration and also to make these goods available when they are demanded.
3. Transportation:Wholesalers buy goods in bulk from the producers and transport them to their own godowns. Also, they provide transportation facility to retailers’ by transporting the goods from their warehouses to the retailers’ shops. Some wholesalers purchase in bulk, therefore, they can avail the economies of freight on bulk purchases.
4. Financing:A wholesaler provides credit facility to retailers who are in need of financial assistance.
5. Risk-bearing:A wholesaler bears all the trade risks arising out of the sudden fall in prices of goods or by way of damage/spoilage or destruction of goods in his warehouse. The risk of bad debt as a result of nonpayment by retailers who have purchased on credit, also falls on the wholesalers. Thus a wholesaler bears all the trade and financial risks of the business.
6. Grading and Packing:A wholesaler sorts out the goods according to their quality and then packs them in appropriate containers. Thus, he performs the marketing function of grading and packing also.
7. Providing Marketing Information: Wholesalers provide valuable market information to retailers and manufacturers. The retailers are informed about the quality and type of goods available in the market for sale, whereas the manufacturers are informed about the changes in tastes and fashions of consumers so that they may produce the goods of the desired level of taste and fashion.
8. Facilitating Disbursement and Sale:Wholesalers sell their goods to retailers who are scattered far and wide. Retailers approach them when their stocks are exhausted from further replenishment. Thus, wholesalers help in the dispersion process of marketing.