Wholesalers in a Private Enterprise System

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• Wholesalers in a Private Enterprise System

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Manage the Middle

• Producers use wholesalers to reach all of the
  consumers in its target
• market
• Numerous retailers
• Easier for a retailer to work
• with a wholesaler than
• numerous producers

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Benefits of Wholesalers

• Provide important marketing services for the
  channels in which they participate
• Provide one or more of the needed marketing
  activities better or at a lower cost
• Combine the orders of several small retailers and
  purchases in efficient quantities
• Specialize in storage and inventory management
• Provide facilities for product storage that
  manufacturers do not have

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Wholesaling Activities
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Wholesaling Activities

• Accumulate products of many manufacturers,
  develop appropriate assortments for customers,
  and distribute the products to their customers
• Assist manufacturers in determining needs of
  retailers and final consumers and provide market
  information to retailers
• Collect and analyze information on sales, costs,
  changes in demand, and inventory levels
• Purchase products from producers and
  manufacturers and selling them to their customers
• Assume risk by investing money in products that
  may be damaged or destroyed

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Full-Service Wholesalers

• Take title to the products they sell
• Provide a full range of distribution activities
• Provide or arrange transportation services

• Offer Credit
• Provide promotion assistance,
• product research, information,
• product installation and repair

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Limited-Service Wholesalers

• May not provide services such as research,
  credit, or promotional support
• Concentrate on one or two
• important functions such as
• warehousing and storage,
• product delivery, or
• accumulating products for
• sale in a convenient location

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Agents and Brokers

• Independent businesses
• Provide specialized exchange functions

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Other Wholesaling Businesses

• Wholesale franchises and cooperatives-groups of
  small businesses that affiliate because of the
  benefit gained from cooperating for marketing and
  distribution activities
• IGA
• FTD
• ACE Hardware

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Wholesale Member Clubs

• Sams and Costco
• Open to final consumers and businesses
• Products displayed in large warehouses

• Limited product assortments are available in
• large quantities
• Customers must transport their purchased
• products

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Changing Role of Wholesalers

• Large retailer may prefer working directly with
  producers (such as a particular designer)
• There are more small- and medium-sized retailer
  and manufacturers than there are large businesses

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Changing Role of Wholesalers

• Access to markets
• Product awareness
• Export and import organization
• -important in building international business
• Better communications and information
• -improved technology, broader customer
  service
• Work to identify their customers
• -understand their needs
• Learn the problems the customers are having
• -with products and marketing activities and
  help them to solve those problems

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Specialized Services

• Marketing Research and Marketing Information
  Services
• Provide Customers with Important Data
• Computer Technology to Process Orders Quickly
• New Methods for Storing and Handling Products to
  Reduce Product Damage, Cost of Distribution, and
  Time Needed for Delivery

RFID applications in smart mirrors used in
fitting rooms in department stores. RFID tags
enable interrogation of database to find
complementary items or locate other sizes or
colors.
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Adding Customer Service

• Marketing and Promotional Planning
• 24-Hour Ordering and Emergency Deliveries
• Specialized Storage Facilities
• Individualized Branding and Packaging Services