middlemen retailer and wholesalers functions

1. Middlemen ,retailers,
wholesalers and their
functions
By-NYK

2. Middlemen
Definition :
• A trader who buys goods from producers and sell them
retailers.
OR
• A middlemen is someone who buys large quantities and
sells to merchants rather than to the ultimate

3. Broker
Factor
Commission
agent
Underwriter
Auctioneers TYPES OF
MIDDLEMEN
Travelling
agent

4. Types of middlemen :
I. Broker : a broker is a agent involved to buying and selling on behalf of
principals for a commission , he does not hold any stock
II. Factor: he is an agent whose function is to receive goods from his
principal for sale in commission . He can sell goods in his own name
III. Commission agent: he acts on behalf of foreign importers his functions
is to buy goods on behalf of client abroad.

5. Cont...
IV. Underwriter : they enter into agreement with promoters of newly started
company which have not been taken up by the public.
V. Travelling agent: sometimes wholesalers appoints number of agents who
goes from place to place shows price list to retailers book orders and
forward them to principals.
VI. Auctioneers: it is an agent who sells goods by auction.

6. FUNCTIONS:
Information:
Middlemen have a role in providing information about the market to
manufacturer. Developments like changes in customer demography,
psychology, media habits and the entry of a new competitor or a new
Price Stability:
Maintaining price stability in the market is another function a
middleman performs. Many a time the middleman absorbs an increase
in the price of the products and continues to charge the same old
price to the customer

7. Cont...
Promotion :
Promoting the products in his territory is another function
middlemen perform. Many of them design their own sales
incentive programs aimed at building customer traffic at
oFuintalentcsi.ng :
Middlemen finance manufacturers operations by providing
the necessary working capital in the form of advance
payments for goods and services.

8. WHOLESALERS
Person or firm that buys large quantity of goods from various producers or vendors, warehouses them,
and resells to retailers.
Wholesaling refers to all activities performed in selling goods and services to those who buy for resale.
They also perform such functions as warehousing, transportation, financing and risk bearing. Wholesalers
also provide market information and management services and advice to the producers.
Wholesalers who carry only non-competing goods or lines are called distributors

9. Functions of wholesalers:
Collection of goods: A wholesaler collects goods from
manufacturers or producers in large quantities.
Storage of goods: A wholesaler collects the goods and
stores them safely in warehouses, till they are sold out.
goods like fruits, vegetables, etc. are stored in cold storage.
Distribution: A wholesaler sells goods to different
retailers. In this way, he also performs the function of

10. Cont..
Financing: The wholesaler provides financial support to producers and
manufacturers by sending money in advance to them. He sells goods to the
on credit. Thus, at both ends the wholesaler acts as a financier.
Risk taking: The wholesaler buys finished goods from the producer and
keeps them in the
warehouses till they are sold. Therefore, he assumes the risks arising out of
in
demand, rise in price, spoilage or destruction of goods.

11. Retailers
Retailer is a person one who sells goods or commodities
directly to consumers these items are purchased from the
manufacturers or wholesalers and sold to the end user at
a marked up price.

12. TYPES OF RETAILERS

13. Types of retailers:
Department store: this type of retailers often the most complex
offering a wide range of products and can appear as a collection of
smaller retail stores managed by one company.
Supermarkets: generally this types of retail concentrates in
supplying a range of food and beverage product.
Warehouse retailers: this type of retailers is usually situated in
retail or business park and where premises rents are low.

14. Cont...
Speciality retailer: specialising in specific industries or products
this type of retailers is able to offer the customer expert knowledge
high level of service
E-tailer : this type of retailer enables customer to shop online via
internet.
Discount retailer: this type of retailer offers a variety of
discounted products. They offer low prices on less fashionable
products from a range of suppliers by reselling end of line and
goods at discounted prices.

15. Functions of retailers:
1. Buying and Assembling:
It has been said that a retailer stocks wide variety of products to meet the requirements of a
large number of customers. For this purpose, the retailer has to assemble products of different
manufacturers from different wholesalers through the process of buying.
2. Warehousing and storing:
Products thus assembled have to be stored by the retailer so that they are held in reserve stocks
out of which consumers requirements are met without any interruption by selling in small
quantities.

16. Cont...
3. Selling:
The ultimate purpose of retailing business is to sell these products to the consumers.
Though a retailer is sometimes referred to as buying agent of consumers, producers and
manufacturers regard retailer as a means of dispersing goods to the market and drawing
income into their hands so that they can continue their business of production.
4. Assumption of Risk:
The retailer has to bear the risk of physical deterioration of goods and fall in value. A retailer
has to stock goods in anticipation of demand from his customers. This stock must always be
sufficient to meet any demand from the customers.

17. Cont...
5. Grading and Packing:
Retailers have to sort out in different lots goods or products left ungraded by the producer
or the wholesaler. Also, they must make arrangements for proper packing of goods which
are sold loose.
6. Financing:
Often retailers have to grant credit to consumers. Credit sale in effect means facilitating
the flow of products through the marketing channel to its ultimate goal. Thus retailers
contribute in financing the marketing process.

18. Cont...
7. Supply of Market Information:
Retailers, being in touch with the consumers, are most favourably situated to study
consumers' ehavior, changes in the tastes, fashions and demand etc. Thus they collect
valuable information pertaining to the problems of marketing.
8. Advertising:
Retailers display goods in their
stores.

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