Mar-301

MAR-301: Introduction to Marketing

02 November 2014

The Benefits of Wholesaling

Wholesaling, which is also known as distributing, is the process of selling commodities and services to intermediaries which in turn resale them to others. This can be referred to as business-to-business transactions. Traditionally, wholesaling is associated with physical product distribution, but wholesale markets also exist for other economic sectors such as energy and telecommunication services. Wholesalers are extremely important in a variety industries such as automobiles, plumbing supplies, electrical supplies, and raw form produce. As the middle agent the wholesaler is only effective when the price they charge is less than the value placed by the customers and if they are able to serve the needs of their customers.

Benefits of Wholesaling

Wholesaling provides an expanded consumer market potential in terms of geographical locations and consumer purchasing power while at the same time providing a cash flow for the manufacturer. There are several reasons for the importance of wholesaling. One reason is that the effective functioning of wholesale linkages contributes to the economic well-being of society because all goods and necessary supplies used in their production also pass through some form of middle agent and wholesaling system. Another reason is that is provides smaller producers with avenues to develop market segments of potential customers and provide links to a more expanded market base. Finally, another importance of wholesaling is in its ability to moderate supply and demand fluctuations and cope with larger transactions with less emphasis on selling techniques and services and product promotion. Some of the marketing functions provided by wholesalers to their buyers are:

* Providing producer’s goods in an appropriate quantity for resale by buyers

* Providing wider geographical access and diversity in obtaining goods

* Ensuring and...