Explain the services offered by wholesalers to manufacturers.
Answers
Answer:
The services offered by wholesalers to manufacturers are as follows :
(1). Information on demand :
The wholesaler inform the manufacturers about the interest for goods and the position of demand in the market.
(2). A large size of production :
It is the wholesaler who makes possible the large scale production by providing a manufacturer with bulk order.
(3). Facility of sales organisation :
The wholesaler buys the goods in bulk quantity from the manufacturers. The Manufacturer therefore need not to constitute a sales organizations separately.
(4) A facility of Advertisement :
The wholesaler sells its product and gives advertisement in large quantity.
(5) Financial assistance :
The wholesaler sometimes, provided the manufacturers with the financial assistance by advancing loans and advance payments for goods
(6) Inventory of goods :
The wholesaler maintain sufficient stock of the goods with it. The manufacturer ,therefore need not to make a separate arrangement for storage of goods.
(7) Standardization of goods :
The wholesaler also discharges the function of grading and developing the standards for the goods.
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How does market information provided by the wholesalers benefit the manufacturers?
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How does the wholesaler help the manufacturer in availing the economies of scale?
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Answer:
(1). Economies of sale :
Since wholesalers buys in bulk quantities, producer has to also manufacturer in bulk. This brings the benefits of economies of sale in production.
(2). Benefits of Advertising and Publicity:
The wholesalers generally do advertising and publicity of goods in their own areas for increasing the sale. Thus, ultimately it will be useful for the manufacturer as their sales will also increase.
(3). Provide continuity in production process:
The wholesalers, generally, place advance orders for the seasonal goods. This ensure this continuity in the production process during the lean season even.
(4). Provide Warehousing facility:
The wholesalers buy the goods as soon as these are produced and store them in their warehouse. This relieves the manufacturers from the risk of storage. In a way, the wholesalers provide the Warehousing facility.