DISTRIBUTION VIA THE WHOLESALER

DISTRIBUTION VIA THE WHOLESALER

DISTRIBUTION VIA THE WHOLESALER

When all the above factors have been considered, the manufacturer must face the ultimate question: will he be able to sell his product as effectively as the wholesaler on the profit margin which exists between the price which the wholesaler would pay him for the product and the price at which he would sell it to the retail shopkeeper. One must remember that the wholesaler's costs are shared between a range of merchandise. The cost of a sales organization, supported by adequate warehousing and despatch services, will often be prohibitive for the distribution of a single product. It is for this reason above all others that wholesale distribution remains viable in spite of the many attractions offered by direct-to-retailer marketing.

The wholesale trade is very diverse. There are firms which cover the entire country with warehouses in many of the large provincial towns, whereas others operate strictly on a local basis. Some specialize in certain classes of goods only: others carry a general range of merchandise.

General Wholesalers

In the grocery and hardware trades, where retailers tend to buy a multiplicity of items in small quantities, the general wholesaler, offering many product lines, is able to maintain a quick delivery service based on adequate stocks. Recent years have seen an increase in 'cash and carry' methods of general wholesaling. The retailer has the advantage of making his purchases at a central warehouse-a kind of wholesale supermarket-and taking the goods away with him. He has the benefit of immediate possession of the merchandise. The wholesaler is saved the cost of a ales force as well as the cost of providing a delivery service. 'Cash and carry', as the term denotes, is conducted on a cash basis, thus relieving the wholesaler of the need for an expensive accounts department.

Specialist Wholesalers

In certain fields, the wholesaler is a specialist. He deals in a very limited range of goods and often supplies his customers with a technical service which would otherwise have to be provided by the manufacturer. Certain types of capital equipment are distributed in this manner. Other specialists deal in food products, such as tea or coffee, and provide a blending service, or in clothing items such as furs which require special storage facilities.

From the point of view of the retailer, the support of a wholesale house can bring a number of benefits. To secure the shopkeeper's business, the wholesaler will often provide not only attractive credit facilities but also will help him in other ways, by providing him with a window-dressing service, giving training to his staff, advising him in the selection of merchandise and lending him money for shop modernization schemes. Many successful retail businesses have been built on the interested benevolence of the old-established wholesale houses.


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