Business StudiesClass Presetation

PPT ON WHOLESALE TRADE

By-Hammad Danish11th Comm. “B”

Wholesale Trade

CONCEPT WHOLESALE TRADE Wholesale means to sell goods relatively

in large quantities. The wholesalers buy goods and commodities in large quantities from the manufactures for the purpose of further selling them in small quantities to the retailers, Government agencies, professional users or

a group but not to final consumers.

Some Leading Wholesale Companies-

Types of Wholesale Trade- 1- Manufacturer Wholesaling- In this case a firm has its own sales

offices and wholesale activities are done at these offices. Sales office may be conveniently located in a market place. E.g., Amway.

2- Merchant Wholesaling- Merchant wholesalers buy, take title and take

possession of products for further resale. Merchant wholesalers may perform full range distribution tasks. They provide credit, store and deliver products, after merchandising and promotion assistance.

3- Agents and Brokers- They perform various wholesale tasks,

but do not take title of products, unlike merchant wholesalers. Agents and brokers enable a manufacturer to expand sales volume because of their special expertise and experience in the field.

Characteristics of Wholesale Trade

Wholesalers are a vital link between maufacturers and retailers

A wholesaler deals only in a few type of products. A wholesaler deals with a limited number of products. A wholesaler usually deals in one line of products. e.g., An electronics distributor deals only in products

that are operated through electricity like fridge, TV, washing

machine, etc. A wholesaler operates in a specific area determined by the producers.

Functions of a Wholesaler 1- Storage- A wholesaler stores the goods in his

warehouse.  He makes them available in appropriate quantities as and when they are required by retailers.

2- Grading and Packing A wholesaler sorts out the goods

according to their quality, size, shape, content etc and then packs them carefully to sell them to the retailers.

  3- Transportation- The wholesaler provides the facility of

transportation to the retailer shop, which is one of the important functions of wholesale trading.

4- Financing- This is an important function of

wholesaler. A wholesaler usually buys goods on cash from the producers and sells on credit to the retailer. In this way, he provides financing facilities to trade transactions.

5- Risk Bearing- The wholesaler bears all the trade and

financial risks of the business. Since he buys goods in bulk for making them available to retailer in small quantities, he takes all the risk involved in marketing of goods. He not only assumes the risk of loss arising from a unexpected fall in the prices of goods but also the risks of damage, deterioration in quality , spoilage etc in his warehouse.

6-  Providing Marketing Information: The wholesaler imparts valuable information to

both the manufacturer and the retailer. He keeps informing the manufacturer about the tastes, preferences, likes and dislikes of the customers. He gathers this information from the retailers.

At the same time he informs the retailer about the

goods produced by the manufacturer. In order to gather the information the wholesaler conducts various market surveys.

7- Dispersion of Goods- The wholesalers sell goods to largely

scattered retailers. When the stock of retailers is exhausted, they approach the wholesalers for purchasing the goods. In this process, the wholesaler provides valuable service in the disposal of goods. The wholesaler also undertakes extensive advertisement and also sales promotion techniques for the dispersal of the goods.

Types of Services Provided by Wholesalers-

Services to Manufacturers

Services to Retailers

Services to Society

1- Services to Manufacturers-

With the help of wholesalers, it is possible for producers to go for large scale manufacturing because a wholesaler buys goods in bulk quantities.

A wholesaler reduces administrative and financial burden of manufacturers by bearing storage and transportation costs.

A manufacturer can cover wide area with the help of wholesaler.

A wholesaler provides valuable information to the producer about the taste and likes of the consumer so that a producer can plan strategically.

2- Services to Retailers The gap between the producer’s offerings

and retailer’s expectation is bridged by the wholesaler.

A wholesaler provides necessary supports to retailers like relief from keeping huge stock, provision of information about new products, etc.

Risk and investment at retailer level is substantially reduced because a wholesaler provides goods to retailers on credit.

A wholesaler helps retailer by providing Point of Purchase materials. e.g., display counter, racks, etc.

3- Services to Society- A variety of products for consumers, is

possibly because of wholesaler. Consumers are benefitted with price stability. Market information provided by wholesalers

helps consumers in decision making.