Definition of Wholesalers

According to American Marketing Association__”  Wholesalers sell to retailers or other merchants and or industrial, institutional and commercial users but they do not sell in the significant amount to ultimate consumers”.

According to S.E.Thomas___”  The wholesalers or the wholesaler’s trader is a trader, who purchases goods in large quantities from manufacturers and resells to retailers in small quantities”.

The working principle of any kind of wholesaler is to generate optimum results for efforts taken. They generally have small margins and are expected to maximize the effectiveness of services offered and reduce inaccuracy in operations.

“A wholesaler is a person whose business is buying large quantities of goods and selling them in smaller amounts, for example to shops.”


Functions of Wholesalers

  1. Sales and Promotion: Wholesalers have their very own salesforce. Wholesalers render the services of their salesforce to the manufacturers to help them reach several business customers operating at a relatively smaller scale at a reasonable low cost. As wholesalers have good contacts, it is usually observed that purchasers rely on them more than a remote manufacturer.
  2. Buying and Assortment Building: A substantial amount of work a customer does is done by a wholesaler on their behalf by way of choosing the products and preparing a mixed bag of all those products as needed by the customer.
  3. Bulk Breaking: Wholesalers can save big time for their buyers through purchasing products in bulk, i.e., large carload stacks, and then dividing this bulk into smaller units as per individual requirements.
  4. Warehousing: The suppliers and customers do not have to bear the inventory costs because wholesalers hold inventories, which decrease inventory costs as well as the risks associated with them.
  5. Transportation: Because of a selection of a prime location for conducting business, a wholesaler can generally deliver the goods faster to the buyers as they are located closer to them.
  6. Financing: Wholesalers finance suppliers by adopting the policy of early ordering and paying all the bills punctually. They also finance customers by granting credit.
  7. Risk Bearing: As wholesalers own the title of the manufacturers, they bear the risk of all the consequences. The cost of all kinds of flaws is borne by wholesalers.
  8. Market Information: One of the most important functions of the wholesaler is that it provides important market information to retailers and manufacturers, which helps the retailers about the demand of consumers and manufacturers.