Home trade has to do with the buying and selling of goods and services within the same country that caters to domestic demand. Wholesale trade is a significant part of home trade as it involves the distribution of goods from manufacturers to retailers to ensure a smooth flow of products in the supply chain.
A wholesaler is a trader who purchases goods in large quantities directly from manufacturers or producers and sells them in smaller quantities to retailers. Wholesalers act as intermediaries between manufacturers and retailers. They play a pivotal role in the distribution and supply of goods within the domestic market.
Functions of the Wholesaler to the Manufacturer
The following are the functions of the wholesaler to the manufacturer:
- Mass Production Support: Wholesalers enable manufacturers to adhere to mass production principles by providing a consistent demand for their products.
- Space Availability: Wholesalers create storage space for manufacturers, allowing them to continue production.
- Financial Support: Wholesalers provide funds to manufacturers by making bulk purchases, facilitating capital flow.
- Manufacturing Completion: Wholesalers may perform final manufacturing touches on certain products.
- Credit Facilities: Wholesalers offer credit to manufacturers, helping them manage their cash flow.
- Price Stabilization: Wholesalers help stabilize prices of goods by controlling supply and demand.
- Price Risk Management: Wholesalers bear the risk of price fluctuations, protecting manufacturers.
- Market Information: They keep manufacturers informed about market trends and dynamics.
- Transportation Relief: Wholesalers handle transportation, relieving manufacturers of logistical challenges.
- Manufacturing Advice: Wholesalers advise manufacturers on production and market needs.
- Market Forecasting: They forecast market trends to aid manufacturers’ planning.
- Advertisement: Wholesalers engage in advertising to promote goods.
Functions of the Wholesaler to the Retailer
- Retailer Advice: Wholesalers provide advice to retailers on product selection and trends.
- Credit Facilities: They offer credit to retailers to manage their inventory.
- Small Quantity Sales: Wholesalers sell goods in smaller quantities to retailers, suiting their needs.
- Price Stability: Wholesalers help retailers stabilize prices of goods.
- Price Risk Management: They bear the risk of price fluctuations for retailers.
- Transportation Support: Wholesalers sometimes transport goods to retailer shops.
- Grading and Packaging: They grade and package goods for retailers.
- New Product Introduction: Wholesalers introduce new products to retailers.
- Choice Variety: Wholesalers offer retailers a wide variety of products to choose from.
- Link to Manufacturers: They act as a crucial link connecting retailers to manufacturers.
- Guarantor and Referee: Wholesalers may act as guarantors and referees for retailers.
- Promotion: They promote retailers’ trade through various means.
- Market Forecasting: Wholesalers forecast market trends for retailers.