You know that manufacturers and producers of any product won’t have the ability to reach consumers. A wholesale dealer may be necessary. The wholesale dealer acts as a link between the producer, the consumer, and the supplier.
We will see examples of products that the producers don’t have the resources to reach the consumer.
Farmers produce enormous quantities of food products. They lack the tools and knowledge to reach the end-user. To market their products, they will need to hire the services of wholesale dealers. He has a network below him of retail outlets. He can also purchase products in large quantities. He can then ensure that the products of the farmers reach the consumers.
2. Large manufacturing companies
Large manufacturing companies cannot sell their products directly to customers. They must sell their products through a chain that includes the wholesaler and the retailer. This allows them to concentrate on the production and leave the sales and marketing aspects to the wholesalers or retailers.
Wholesale dealers can be classified in many different ways. These are the three most popular wholesale dealers.
1. Wholesale merchant dealer
They are usually involved in purchasing products in bulk from producers and manufacturers. They are responsible for the distribution and storage of the products to the customer and retailer. They are known by different names, such as distributor, wholesaler, and so forth. They purchase items in bulk and then pass them along to other retailers. They don’t usually sell direct.
In reality, they are intermediaries who act as a link between the producer/consumer. The broker does not take title to the goods, which is a fundamental difference from the wholesale merchant. They work on behalf of their principals and receive a commission. They can also be called selling agents, commission agents, export- and import agents, and many other names. Their only source of income is the commission.
3. Agents for manufacturers:
Manufacturers may open small sales offices to sell their products exclusively in order to keep in touch with customers. They might also own warehouses. They do not sell or exhibit products from rival companies. They work directly with customers and sell their products wholesale.
The importance of wholesale dealers has been dramatically diminished by the rise of internet marketing. Online stores are now standard. These online stores allow customers to interact directly with sellers. They don’t need to have a warehouse. They can immediately pass the order on to the manufacturer company, who will arrange for delivery.
The customer today has many options. Dealers must double as retailers, service providers, and so forth. This is an excellent example of diversification.