Can You Explain The Advantage Of Wholesalers To The Retailers?

Advantages to retailers
1- The retailers deal with large number of customers daily and keep a wide variety of goods at display in the shops. The wholesalers, who are situated at convenient places, meet their daily or weekly requirements of goods. The retailers thus concentrate on the sale of goods
2- The wholesalers purchase the goods in bulk but supply to the retailers in small lots as and when needed by them. The retailers are thus able to operate the business with less capital and less risk.
3- The wholesalers are mostly specialized persons in the purchase of commodities. They prefer to buy from the producers who manufacture quality product and also make available at cheaper cost. The advantage of the experience of wholesalers automatically passes on to the retailers who also get quality products at lesser price.

4- The wholesalers purchase the goods from the producers at discount. There is also freight savings in transporting commodities in bulk. The retailers share the benefits of the discount and freight savings.
5- The wholesalers mostly sell the goods on credit. This enables the retailers to expand the business with less capital expenditure.
6- Another important role of the wholesalers is to keep the retailers in touch with the change in the fashion and the availability of new products, etc.

Agent wholesalers
The agent wholesalers are an important category of the middleman. The outstanding feature of agent wholesalers is that they do not take title to goods, which they sell. Their main function is to negotiate sales on commission basis primarily for the manufacturers. The specific type of agent wholesalers includes:

1- brokers
Brokers do not have title to the goods nor their physical possession which they sell. They simply negotiate for the goods either on the behalf of the buyer or of the seller. The brokers are paid in the form of commission or fees when the purchase of the commodity is implemented.
2- selling agents
The distinguishing feature of the selling agents is that they operate on contractual basis. They handle the entire output as manufacturer's client in an unrestricted territory. They have almost full authority by their principles in regard to selling price and terms of sale. The selling agents are highly skilled in the art of selling.

3- manufacturers agent
Manufacturers' agents are mainly salesmen who sell only a part of the total production of a firm. They have a restricted territory to operate. They have less authority as to price and terms of sale. Manufacturer's agents are generally engaged in the sales of machinery, chemicals, steel, etc.