Wholesale Trade

Wholesale trade is the buying and selling of goods and services in large quantities for the purpose of resale or intermediate use. Wholesaling covers the activities of those persons or firms who sell to retailers, other merchants, and industrial, institutional and commercial users — but who do not sell in any significant amount to the ultimate consumers.

The wholesaler as a vital link: Wholesalers connect manufacturers with retailers. They allow producers to reach a large number of buyers spread over a wide geographical area (through retailers) and, at the same time, carry out many functions in the process of distribution.

What wholesalers do:

• They generally take the title (ownership) of the goods and bear the business risk, buying and selling in their own name.
• They purchase in bulk and sell in small lots to retailers or industrial users.
• They undertake a range of activities — grading of products, packing into smaller lots, storage, transportation, promotion of goods, collecting market information, gathering the small and scattered orders of retailers, and distributing supplies to them.
• They relieve retailers of holding large stocks and often extend credit to them.

These functions cannot really be eliminated. If wholesalers did not exist, the same jobs would have to be done by either the manufacturers or the retailers themselves. …