Services to Manufacturers
The main services presented by wholesalers to the producers of commodities and services are as shown below:
- Facilitating Large Scale Production: Wholesalers gather small orders from many retailers and place the pool of such orders to manufacturers and purchase bulk quantities. This helps the producers to carry out production on a big scale and take advantage of the economies of scale.
- Bearing Risk: The wholesalers deal in commodities with their own name, take delivery of the commodities and keep them purchased in large quantities in their warehouses and hence In this process they bear lots of risks such as the risk of fall in prices, theft, pilferage, spoilage, fire, etc.
- Financial Assistance: The wholesale merchants present financial help to the manufacturers in the sense that they normally make cash payment for the commodities bought by them. A few times they also advance money for the bulk orders which have been placed by them.
- Expert Advice: As the wholesale merchants have direct contacts with the retailers, they help by advising the producers about various aspects including customer's tastes and preferences, market conditions, competitive activities and the features desired by the purchasers. And hence they are an important source of market information on these and related issues.
- Help in the Marketing Function: The wholesale merchants take care of the distribution of commodities to many retailers who, in turn, sell to large number of buyers spread over a large location. This helps the producers to take care of the production activity alone.
- Facilitate Continuity: The wholesale merchants enable continuity of production activity for the whole year by buying the goods as and when they are manufactured.
- Storage: Wholesale merchants take delivery of commodities when these are produced in factory and keep it in their warehouses. This relieves the producers from providing storage facilities for their finished goods.