What are the important functions performed by a Wholesaler?

Wholesalers perform a number of functions in the marketing of goods. More important of the marketing functions performed by them are:

i) Assembling and buying

ii) Storing or warehousing, i.e., holding stock of goods

iii) Transporting

iv) Financing

v) Risk – bearing

vi) Grading, packing and packaging

vii) Providing market information

viii) Dispersing and selling

i) Assembling and Buying

The assembling function performed by wholesalers consists in the collection of agricultural produce in small quantities from numerous widely – scattered small-scale producers for the purpose of handling them more economically. In case of manufactured products, assembling function involves bringing together stocks of goods from different manufacturers producing the same line of products.

ii) Storing or Warehousing

Closely related to the assembling function is the function of storing or holding stocks. It has been seen that there is a time gap between the production and the consumption. Neither the production nor the consumption of goods takes place in an uninterrupted flow. Therefore, to avoid periodic shortages, goods must be held in reserve.

iii) Transporting

Wholesalers purchase in bulk from manufacturers and transport these goods to their own warehouses. Also, they make arrangements for the transportation of goods from their warehouses to the retailers’ shops.

iv) Financing

Retailer, who is in need of financial assistance, is granted by the wholesaler a fairly generous term of credit. Manufacturer too generally wishes to avoid getting his capital locked-up in finished goods, book debts etc. Wholesaler takes delivery of goods and asks for a relatively short period of credit from the manufacturers. Further, a great deal of financial burden of holding stocks is carried by the wholesaler, who stores finished goods of manufacturers in his own warehouse. Thus, manufacturer is relived of the financial burden of carrying stock.

v) Risk-bearing

Risk is involved whenever goods are owned. The wholesaler assumes the risk of loss likely to arise from the fall in the price of goods. The risks of damage, deterioration in quality, spoilage, pilferage, theft or loss by fire of goods kept in the warehouse are also borne by the wholesaler.

vi) Grading, Packing and Packaging

Wholesalers sort out products of different grades according to the quality, size, shape, moisture contents etc. They also break open the packed cases, break them into smaller lots and repack them for delivery to retailers.

vii) Providing Market Information

Wholesalers provide information to the retailers about the goods, which are available in the market. Also, they collect information from the retailers about the changes in the tastes, fashions, buying habits of the consumers, etc., and then pass them on to the manufacturers.

viii) Dispersing and Selling

The goods assembled by the wholesalers are kept by them in stock only to be distributed among the retailers who are often scattered over a large area. Whenever retailers find their stocks depleted they buy goods in smaller quantities from these wholesalers to replenish their stocks. Thus, wholesalers help in the dispersion process of marketing.