Wholesaling involves the marketing process where intermediaries between the producer and consumer buy and resell goods over an expanded geographical area. Wholesalers are effective when their price is less than the value customers place on the goods and services. They facilitate bulking and distribution of goods.
Types of Wholesalers
The Census of Wholesale Trade employs three types of wholesalers:
- Merchant Wholesalers
- Manufacturer’s Sales Branches and Offices
- Agents and Brokers
Merchant Wholesalers
Merchant wholesalers take over ownership of the goods from the producer and are responsible for the stock owned. They buy and assemble goods in large quantities and resell them to retail outlets and industrial, commercial, or professional users.
Manufacturer’s Sales Branches and Offices
Agents and Brokers
Agents and Brokers, like Drop Shippers, do not take ownership of goods. They collect orders from retailers or commercial purchasers and arrange delivery directly from the manufacturer.
Direct Marketing Wholesalers
Direct Marketing Wholesalers have reached remote rural areas where the potential for opening a market is low.