Definition: A wholesaler is a merchant who purchases goods in large quantities from the manufacturer sells in small quantities to the retailers. The wholesaler is the middleman essential to the distribution of goods.


Bulk breaking: The wholesaler purchases goods in bulk or large quantity from the manufacturer and sells in small quantities to the retailers

Financing: They finance production by ensuring prompt payment to the manufacturer and this will facilitate production process

Information dissemination: They provide the necessary information to the manufacturer regarding the retailers’ and consumers’ views about the products.

The views may concern changes in taste, fashion and defects.

Warehousing: The wholesaler provides warehousing facilities to get rid of stock piling at the production point. Goods are stored here until they are bought, hence it spurs the manufacturers to keep on producing

Advertising: The wholesaler helps in carrying out product advertising and sales promotions and by so doing creates awareness for the products

Price stability: They help to prevent price fluctuation by stocking the goods until they are demanded

Provision of transport: The wholesalers often provide transport needed in distribution. They send their vehicles to collect the goods from the manufacturers.

Credit facilities: The wholesaler can give credit facilities to the manufacturer, sometimes by paying upfront for the products

Risk bearing: The wholesaler takes charge of the goods, thereby accepting responsibility for losses suffered in the course of distribution

Branding and packaging of goods: The wholesalers brand and package goods received from the producers before selling to the retailers

Giving advice to manufacturers: They can advise the manufacturers on the market situations, e.g. on the brand of goods needed by consumers.

Market research: The wholesaler carries out market research to provide a two-way flow of information relating to market situations between the manufacturer and potential buyers.

This assists in the marketing of current products and development of new ones


Provision of variety of goods: The wholesaler enables the retailers to stock variety of goods, which they purchase from different manufacturers

Provides credit facilities: They allow retailers to but on credit and pay for the goods later. This enables retailers to run their business with a small capital

To advise the retailer: he can advise the retailer as a result of his expert knowledge of the goods. He can inform him about new developments in the market.

Makes goods available in small quantity: Wholesaler carries large stock of goods and divides it into small quantities in order to sell to the retailers.

Transportation services: The wholesaler can help to transport or convey goods to the retailer’s shop.

Grading and packaging of goods: He puts finishing touches to production by grading, branding or repackaging of products before selling to the retailers.

Price stability: The manufacturer carries out this duty for the retailer by storing the goods in his warehouse and releases them according to the demand of the retailer.

Advertising of goods: By embarking on advertising or sales promotion, the wholesaler can help in creating awareness for the products on behalf of the retailers.

Risk bearing: The wholesaler bears the risk of fall in prices on behalf of the retailer by buying and storing of products in large quantity.

Links the retailer and the producer: He provides a link between the producer and the retailers as information concerning the products flow from the producer through him to the retailer


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