6 Roles of Wholesalers, Channeling Manufacturers to Retailers

Wholesalers are one of the important channels in the distribution chain of goods. They buy large quantities of products directly from manufacturers or distributors and resell in smaller units. Their customers are quite varied, namely retailers, commercial industries, institutions, or end consumers of the products.

Here are 6 functions of wholesalers in the market.

1. Assemblers and warehouses

Wholesalers buy various types of goods from different manufacturers in advance of demand. They store a large stock and make sure goods are always available for retailers. The time gap between in and out of goods leads wholesalers to another function, which is warehousing. Retailers can replenish their stock from time to time by buying goods from wholesalers.

2. Graders, dividers, and packers

After purchasing goods from different manufacturers, wholesalers sort them according to size, shape, quality, etc. They then split those into smaller lots. Some even repackage and insert their brands. They perform grading and standardization functions, ensuring uniform-quality supply for retailers.

3. Market observers

Wholesalers foresee market conditions. They collect information from retailers about changes in consumer tastes, fashions, and buying habits, which they can pass on to manufacturers. They also conduct market surveys by comparing prices, quality, taste, buying power, competitors, etc. Based on extensive knowledge of products from different manufacturers, they can also advise retailers.

4. Price stabilizers and risk bearers

Forecasting market conditions, demand, and tastes, wholesalers arrange preparations to meet the demands that will emerge. They help to stabilize prices by ensuring supply availability on demand. Not only do they stabilize prices, but they also help manufacturers reduce the greater-risk involved in the distribution process. Risks can arise, for example, due to changes in demand or damage to goods while in storage.

5. Financiers

Wholesalers help to finance manufacturers and retailers. For manufacturers, wholesalers buy large quantities of goods regularly in cash, help in sustaining the manufacturers’ businesses. They also use to order goods early to meet surging demand by giving advance money or deposit. For retailers, wholesalers sometimes grant installment payments.

6. Goods spreaders and transportation providers

With wholesalers, manufacturers can reach more extensive consumers and locations. Wholesalers move goods from producers to their warehouses, then from there to retailers. They even provide delivery services to reach more retailers, also to retain big customers. They manage and maintain their own vehicles for the movement of goods.

To assist in managing vehicles including the drivers, wholesalers need a GPS tracker. In addition to tracking the vehicles’ location, wholesalers can also monitor the drivers’ credibility and the goods’ safety with the help of a GPS tracker.

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