Services of Wholesalers trade to Manufacturers and Retailers

Services to Manufacturers

i) Wholesaler helps the manufacturer to concentrate on the manufacturing operations.

ii) The wholesaler buys in large quantities. Thus, he enables the manufacturer to get the benefit of economies of large scale production.

iii) The wholesalers collect orders from a large number of retailers and supply them from the stock of goods supplied in bulk by the manufacturer.

iv) By stocking products of seasonal nature, he makes it possible for the manufacturer of such products to continue production.

v) The wholesaler helps the manufacturer to regulate his production in accordance with the changing requirements of the market.

vi) The wholesaler enables the manufacturer to make better use of his capital for production by relieving him of the necessity of carrying large stocks.

vii) Wholesalers help in price stabilization. They stock goods during the slack season and sell them during the period of peak demand.

Services to Retailers

The wholesaler renders the following services to the retailers:

i) The retailer need not carry stock of large variety of products to meet the demand of his customers.

ii) Wholesalers relieve the retailers of the necessity of placing orders to different manufacturers. Thus, the number of the sources of supply for the variety of goods is reduced to the minimum; hence buying problem is considerably simplified.

iii) Wholesalers enable retailers to obtain supplies more quickly than they could by placing orders directly to different manufacturers.

iv) The wholesaler provides a greater opportunity for a retailer to order a number of products at the same time so that transport and packing costs are incurred in respect of a single consignment in place of a number of consignments. This leads to savings in transport and packing costs.

v) Wholesalers specialize in a particular line of products. Therefore, he has an expert knowledge of the market conditions relating to such products. He passes on his knowledge to the retailer who cannot posses such knowledge as he deals in a large number of products of different varieties.

vi) Wholesalers help retailers to take advantage of favourable fluctuations in prices.

vii) By enabling retailers to replenish their stocks in smaller quantities, wholesalers enable them to operate their business with lesser amount of capital and derive the benefits of economy in space, and more economical sue of capital.

viii) Wholesalers provide financial assistance of material significance to retailers. This is done by allowing credit to the retailers purchasing goods from them. This in effect helps the retailer to manage his business with smaller amount of working capital.