WHOLESALING

Wholesaling is a part of the marketing system. It provides channels of distribution which help to bring goods to the market. Generally indirect channels are used to market manufactured consumer goods. It could be from the manufacturer to the wholesaler, from the retailer to the consumer of through more complicated channels. A direct channel moves goods from the manufacturer of producer to the consumer.

Wholesaling is often a field of small business, but there is a growing chain movement in the western countries. About a quarter of wholesaling units account for one-third of total sales.

Two-third of the wholesaling middleman are merchant wholesalers who take title to the goods they deal in. There are also agent middlemen who negotiate purchases or sales or both.

They don’t take title to the goods they deal in. Sometimes they take possession though. These agents don’t earn salaries. They receive commissions. This is a percentage of the value of the goods they sell.

Wholesalers simplify the process of distribution. For example, the average supermarket stocks 5 .000 items in groceries alone, a retail druggist can have more than 6,000 items. As a wholesaler handles a large assortment of items from numerous manufacturers he reduces the problem of both manufacturer and retailer. The store-keeper does not have to deal directly with thousands of different people. He usually has a well-stocked store and deals with only a few wholesalers.

Comprehension Questions

1) What is the aim of the wholesaling?

2) How can you describe a direct channel of distribution?

3) What is an indirect channel of distribution?

4) What channel of distribution is preferable?

5) Is there any difference between a merchant wholesaler and an agent middleman? What is this difference?

6) How does a wholesaler simplify the process of distribution?

7) What would a retailer have to do without wholesalers?

Choose the necessary word and put it in the sentence.

1) They use both direct and indirect … a) wholesalers

of distribution. b) take title

2) Agent middlemen do not …. to the c) retailer

goods they deal in. d) stock

3) Usually wholesaling … stands e) channels

between the producer and the retailer. f) assortment

4) A supermarket may … thousands of g) to receive

commissions items. h) middleman

5) Usually a wholesaler handles a large …

of items of numerous manufacturers.

6) Agent middlemen don’t earn salaries,

they … commissions.

7) A wholesaler doesn’t deal with the

customers, … does.

8) … simplify the problems of

manufacturers.

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