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Services by Retailers

Services by Retailers

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Published by Sambit Mohanty

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Published by: Sambit Mohanty on Aug 20, 2012
Copyright:Attribution Non-commercial


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Wholesalers and retailers are the two important types of middlemen forming a part of thedistribution channels. They act as an intermediary link between the manufacturers and theconsumers of goods. They specialize in providing a wide range of services for both the producersas well as the consumers. They reduce the amount of efforts required by the manufacturer indistributing his product to the final consumers and provide vast market coverage to his products.They greatly increase the efficiency of exchange and lead to reduction in total cost of distributionof products. They provide ready delivery of goods to the consumers at places convenient andaccessible to them. They also provide after sale services and handle consumer grievances. Theyalso act as a communication channel by providing information about the products to theconsumers, on one hand, and the consumer feedback to the producers on the other hand.
 Wholesaler may be defined as the middlemen who operate between the producers (from whomthey purchase goods) and the retailers (to whom they sell goods). Wholesaler refers to anyindividual or business firm selling goods in relatively large quantities to buyers (retailers) otherthan the ultimate consumers. Thus the manufacturers who sell their products directly to retailersmay also be regarded as wholesalers. The specialized knowledge and skill of wholesalersincreases the efficiency of the distribution network. The wholesalers provide important servicesand solve the problems of both the manufacturers and the retailers.
Services provided by the wholesalers to the manufacturers
They place orders for the product in advance on the basis of expectations regarding thedemand for the product. This enables the manufacturer to plan his production and securethe economies of scale.
They may also provide transportation facility by carrying goods from producers togodowns and then to retailers.
They perform advertising and sales promotion activities and also employ expert salesrepresentatives for the purpose.
They provide financial accommodation to manufacturers in the form of cash paymentsfor goods purchased from them as well as provide credit to them.
They keep the manufacturers updated on the changes in customers' habits, tastes,preferences and fashion.
They also play an important role in fixation of the final prices of the goods.
Services provided by the wholesalers to the retailers
They act as the retailers 'buying agent' and saves them from the trouble of searching outand assembling goods from several manufacturers.
They inform the retailers about the new products, its uses and changes in their prices.They also assist the retailers in advertising and selling of the products.
They provide financial assistance to retailers, sell goods on credit to retailers and thushelp them to operate with small working capital.
A wholesaler being the ware-house keeper of the market, they protect the retailers fromthe risk of loss arising from holding large stocks of the product.
They may also sort out different grades of products according to quality and pack thegoods into small lots for the retailers.
Retailing refers to all the transactions which involve sale of goods or services to the ultimateconsumers. A retailer is a middleman who procures goods from the wholesalers and sells it to thefinal consumers. They form a vital link in the channel of distribution of products neither becausewithout him, neither the products would sell to distant places nor would it be possible forconsumers to buy goods of their choice in shops located nearby. They have a much strongerpersonal relationship with the consumers and deal directly with the people of varied tastes andtemperaments. They form the last link in the chain of distribution and give the final selling priceto the product. The retailers provide important services and solve the problems of themanufacturers and wholesalers on one hand and the consumers on the other hand.
Services provided by the retailers to the wholesalers and manufacturers
They provide selling outlets to wholesalers and manufacturers.
They save the manufacturers from the inconvenience and expenses of selling the goods insmall lots to a large number of consumers.
They communicate the needs and desires of consumers to the manufacturers.
They may also arrange for transportation of goods from the wholesalers' godowns to theultimate consumers.
They may also perform storage function by keeping stocks of goods.

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