The wholesaler conjures up the image of a big nameless warehouse. However the wholesaler actually wears many hats. Covering a number of areas within the distribution process. A wholesaler is the middle of the relationship between manufacturers and retailers. Therefore the wholesaler covers a lot of ground on behalf of both sides of the distribution triangle create an easier transition from one to the other(Nariu, & Flath, 2005).
For instance, the relationship between the wholesaler and the manufacturer encompasses a number of areas. The wholesaler acts as a buyer first and foremost therefore adding to the bottom line of the retailers financial. In addition, the wholesaler is advertising said product possibly bringing in revenue from retailers and competitive busineses as well that one to keep their business with competitive stock. The warehouse also acts as distribution and possibly ...view middle of the document...
This also adds to the variety of inventory a retailer can have on site. The wholesaler is also abreast of market developments including price differentials, spikes, or savings. Finally the wholesaler is a key component to accurate inventory control (Wuyts, Stremersch, Bulte, & Franses, 2004). The wholesaler is to the retailer what the retailer is to the consumer.
Another benefit of the wholesaler is the wholesaler reduces the number of transactions that take place between the manufacturer and the retailer. An example of this if four manufacturer each offered one single color ball and 4 ball retailers each want balls then each of the four retailers have to go to each of the four manufacturers making business competitive yet confusing and could create a situation where only a limited number of people are seeing a positive product margin. However with the addition of a wholesaler than each of the manufactures are selling an adequate amount of their balls and that one wholesaler is selling a specific amount of each ball to each seller the amount of transactions are reduced and the instances where unfair business practices can come into play(Nariu, & Flath, 2005).
In addition transportation issues are a large part of cost therefore wholesalers are not only acting as an intermediary but also can transport a large amount of inventory. This means that items are costing wholesalers less gas per item and therefore wholesalers can forward that saving on to the retailer and the retailer can offer a similar saving to the consumer. Whereas some believe that the wholesaler is the difference between a business succeeding and failing. Depending on the industry some organizations believe that the wholesaler is the major contributing factor to the downfall of an organization (Gomberg, 1990) However most organizations can benefit from the contributions of a wholesaler.
The wholesaler offers a wide variety of services that not only contribute positively to the channels of distribution but the results show across the board all the way to the consumer.