Wholesale Trade Flashcards
(25 cards)
What is wholesale trade?
Wholesale trade deals with the bulk buying of goods from various manufacturers and the breaking down of this bulk into smaller quantities which is them soul to the retailers.
Functions of wholesalers warehousing?
It enables the manufacturers to obtain the benefits of large scale production. The manufacturer does not have to carry large stocks in the factory. The wholesalers buy straight from the manufacturers and put them in their own warehouse until they required by the retailers.
Functions of wholesalers marketing?
The wholesalers create markets for the manufacturers. It seeks new customers, both home and abroad, through catalogues. advertisement etc. It can also maintain its warehouse as a showroom where the retailers can select their goods from different manufacturers.
Functions of wholesalers reservoir?
By buying in bulk from different manufacturers and storing these goods in their warehouse, the wholesalers serve as a source of supply to retailers.
Functions of wholesalers breaking of bulk?
This is the most essential function of the wholesalers. They buy in large quantities from the manufacturers and sell them in smaller quantities to the retailers. Sometimes the wholesaler also packs the goods before selling them to the retailers.
Functions of wholesalers price stability?
The wholesalers may buy manufactured goods but do not put them in the market all at once. This is especially free for seasonal goods. This is to prevent shortage or glut in the market. By spreading these goods throughout the year, the wholesalers also prevents wild fluctuations in the prices of such goods.
Functions of wholesalers delivery?
The wholesalers often provide the delivery of goods to the retailers. They also use their own transport system for purchases from the manufacturers.
Functions of wholesalers information?
The wholesalers have expert knowledge of the goods they deals with. They give advice, and keeps retailers informed of any new development in the manufacturers product.
Functions of wholesalers risk bearing?
The wholesaler allows along period of credit to retailers. At the same time, they receive only a short period of credit from the manufacturers.
Why the number of wholesalers is declining?
Nowadays there has been a change in trend of selling. There has been an increase in the growth of large scale of retailers who buy directly from manufacturers. Manufacturers on the other hands own their own shops for direct sales to consumers, they prefer selling directly to retailers in order to promote their products.
Other reasons: large orders.
Multiple stores, department stores, and huge supermarkets order directly from the manufacturers because these large scale retailers usually buys in bulk. It is cheaper for them to buy directly from the manufacturers.
Other reasons: branded goods.
Some manufacturers, especially of foodstuffs, prefer to distribute the products directly to retailers. They often use their own transport for delivery. An example is the nestle products, which distributes maggie noodles, nestle milk, milo, etc.
Other reasons: expensive goods.
Some expensive goods usually have slow turnovers. In cases manufacturers usually deal directly with their retail outlets. For example, manufacturers of furniture, television sets, jeweller etc.
Other reasons: technical knowledge.
In case of some intricate machinery, the manufacturers employ men with expert knowledge of the product to sell the goods. In this way, the wholesalers as well as the retailers are eliminated.
Other reasons: wide demand.
Some manufacturers produce standardized products, which have a wide demand. Also, this manufacturers would prefer to have direct control over their products. Hence they set up their own retail outlets. For example, adidas footwear and nike footwear.
What is general or traditional wholesalers?
This type of wholesalers can be regional (serving local retailers only) or national. They usually stock a wide variety of goods including food and non food items.
What is specialist wholesaler/merchants?
These wholesalers deal with a particular trade. Other examples include fish merchants, fruit and vegetable wholesalers who sell the products directly to specialist retailers like fish mongers and grocers.
What is cash and carry wholesalers?
These wholesalers are trying to make it as easy as possible for small Independence retailers to compete with large retailers by offering goods at the lowest possible prices they can. Cash and carry wholesalers are able to do this because they do not send out sales people to collect orders or deliver stock to their customers.
What is bonded warehouse?
These are used to store goods or materials that have been imported by a company and on which ‘import duty’ is paid. Importers will leave their goods in bonded warehouse until they sell them and they only have to pay import duty then they take the goods out of this bonded warehouses. Bonded warehouses are found near ports.
Explain the services provided to the manufacturers by the wholesalers?
Wholesalers provide a convenient outlet for manufacturers to sell their goods in huge quantities. Wholesalers pay promply for the goods they receive. This means that the goods are quickly turned into cash for the manufacturers organisation. Manufacturers rely on wholesalers to market their products to retailers using attractive displays and mail shots.
Explain the services provided to the retailers and consumers by the wholesalers?
The wholesaler buys products in large quantities from manufacturers and sells them to retailers in smaller and more convenient amounts. Wholesalers allow retailers to stock very small quantities of new product lines so that they can test them in their own shops to see if the customers like them or not. Some wholesalers may offer delivery services to retailers who have trade accounts with them.
What is an agent?
An agent who works on behalf of another person and receive a commission for his services rendered is called an agent while the person on whose behalf in agent works is called the principle.
What is a broker?
Brokers are agents appointed to buy and sell for the principles. They help the exporter in finding buyers for their goods. Brokers do not have the possession of goods hence they are not responsible for delivery of goods. They receive commission for the services rendered to the exporter.
What is a factor?
Factors are also middlemen, appointed by exporters sell their products. They are not responsible for buying goods for their principal.
