Characteristics of wholesale trade not wholesalers
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CHARACTERISTICS OF WHOLESALE TRADE
Sale of Goods
A wholesaler purchases goods in lots and batches in order to resell them accordingly to other merchants or commercial users.
Purchase of Goods
A wholesaler purchases goods in large quantity directly from the producers/ manufacturers so as to meet the requirement of supply as demanded by the retailers.
Quantity of Goods
A wholesaler sells the goods in small quantity to other merchants after purchasing them from producer in bulk.
Appointment of Agents
A wholesaler appoints number of agents or brokers for the distribution of his goods in order to distribute/ deliver to the different locations of retailers. These agents receive commission for their services.
Cash and Credit Sale
A wholesaler deals in both forms means cash and credit with retailers. Generally, most of the sales are on credit basis depending on market norms and practices.
Nature of Goods
A wholesaler deals in a few specialized products or commodities. There may be different varieties of the one commodity.
Fixed Prices
A wholesaler sells his goods to the other merchants at fixed price to avoid different rates in selling. The prices may be differ in certain cases that may be involved the factors of quantity and mode of payments etc.
Profit Margin
In wholesale business, apparently, the margin of profit is very low but it gets always high in total due to greater sale.
Advertisement
Wholesalers also advertise of their goods/ commodities scientifically for promoting sales of the manufacturers.
Financial Assistance
A wholesaler possesses ample funds and easily extends to manufacturers and retailers in form of advance and credit sale.
Place of Business
Commonly, a wholesaler trader establishes his business in central place or big/ main market of the city, so that the retailers can easily approach the business point.
Cash Purchases
Wholesalers mostly purchases goods in cash from manufacturers or producers of the products/ goods and help them in marketing for their products. Sometimes, they make payments in advance.
Distribution of Goods
Wholesalers sell their goods to retailers in small lots. In this way, they help in development of the distribution channel.
Grading
Wholesalers, in their warehouses classify the goods in different grades according to its quality and pack them by marketing them accordingly.
Transport
Wholesalers provide transport facilities to carry goods from the manufacturers to their warehouses as well as to different locations of retailers.
Risk Taking
Wholesalers take more risks as they purchase goods from manufacturers to their warehouse and to different retailers.
Providing Information/ Feedback
Wholesalers provide information to manufacturers regarding fashion/ in-demand, design and taste of consumers. They collect all the information from retailers and their distributors.
Controlling the Prices
Wholesalers can balance supply and demand of the goods by shifting them from one area to another. This function helps in stability of prices.