Question

Long answer type questions.

What do you mean by wholesalers? Explain various services given by wholesalers.

Answer 1

Wholesalers are the traders that buy and sell goods in bulk, usually for resale in local markets. They act as a link between the manufacturers and the retailers by purchasing and selling large quantity goods from the producers and then selling them to the retailers. They perform a wide variety of functions and provide various services to the manufacturers as well as the retailers.
The following are some of the services provided by wholesalers:

1. Facilitate large-scale production: Wholesalers purchase goods in bulk from manufacturers and sell them to retailers in small quantities for further resale. This bulk purchase made by wholesalers enables manufacturers to undertake production on a large scale.
2. Providing storage facilities and risk bearing: When wholesalers purchase and sell goods in bulk from manufacturers and retailers, respectively, they store these goods in their godowns or warehouses, reducing the retailers’ and manufacturers’ burden of finding proper storage. This in turn reduces the various kinds of risks related to the storage of goods.
3. Economies of Scale: Wholesalers provide manufacturers with a variety of warehousing facilities, such as collection, storage, marketing and distribution of goods. These services reduce the burden on manufacturers by creating time and place utility, thus enabling them to produce goods on a large scale and benefit from the economies of scale.
4. Collecting market information: Wholesalers provide different kinds of information to manufacturers as well as retailers, such as information about the tastes and preferences of customers and prevailing market conditions. This, in turn, helps manufacturers produce goods according to the market needs and advice retailers about what to sell at what time.
5. Sales promotion: Wholesalers also help retailers to increase their sale by undertaking advertisement and sale promotion activities.