The wholesaler and his duties to the producer and retailer

                        DEFINITION 

Wholesale trade is also known as wholesaling. If you choose not to call it wholesale trade you could address it with the later term. The person you are talking to, if familiar with business terms would know you are referring to the same thing. The name is indicative of what this concept is. It is called wholesale trade, implying that it is a trade. You would find this claim in many textbooks.

Wholesale trade is a script that has often been performed by wholesalers. Whenever anyone engages in buying goods in bulk from the company and sells it to retailers, he is said to have engaged in wholesaling. Therefore we must refer to wholesaling as the act of buying from producers, and trading to retailers. As already stated this business is done by the wholesaler. By definition anyone who indulges in wholesaling is a wholesaler. It typically involves three major characters namely; the producer, wholesaler and retailer.

THE CHARACTERS INVOLVED IN RETAILING

As already stated wholesaling involves buying and selling to the retailer. But buying from whom? The wholesaler has to source his products from somewhere. Since he cannot be indulges in both production and wholesaling. Wholesaling is his specialization. He buys from the producer. The producer is anyone that produces products in bulk. Naturally the producers own companies where they perform mass productions of products which they would sell to the wholesaler, usually at a cost. The wholesaler does not need any introduction as we have already defined him. He is the buyer from the producer and sells to the retailer. He usually buys in large quantities and sells in small quantities to his customer- the retailer. The retailer buys from the wholesaler and sells to the consumers. This three characters are necessary for the effective success of wholesaling. Without any of them, it cannot take place.

 THE CHARACTERISTICS OF A WHOLESALER 

To be called a retailer one must meet with certain requirements. 

1. He must be a bulk breaker: If you purchase small amount of goods from someone and sells it to someone desiring, do not think you are a wholesaler even if you have been consistent at it for a long time. Since a wholesaler buys and sells, do not be tempted to conclude that you meet the requirement, because you trade. The wholesaler does not engage in any kind of trading. He engages in mass purchase. He buys in large quantities from the producer. The amount he buys are usually bulky. Know this if you ever want to become a retailer. You must buy in large quantities not little. Knowing this would help you to source adequate capital which would enable you to fulfill this state.

2. Apart from buying, the retailer is also a seller. He sells the products he has secured with money. To whom? To the retailers. He usually sells them in small amounts to different retailers.

3. A middle man: The wholesaler acts as a middleman between the two traders- producer and retailer. 

This are the three and major characteristic of the wholesaler. It is what defines most of them. 

THE RELATIONSHIP BETWEEN THE WHOLESALER AND RETAILER 

1. Bulk breaking: The wholesaler is a customer of the producer. In that he buys in large quantities from him and trades it with the retailer. By doing this he performs the function of a mass buyer, or as it is termed in economics, bulk breaking.

2. Information supply. The wholesaler gives information to the producer. What kind of information you may ask. It is about the retailers views, choice and preference over an item. Through his dealings with the retailers, he learns their choice and what they demand about a certain product. So, he usually tells the producer the way that the retailers view their products, so that they could reflect it on their product. Because only if the product meets their taste can they purchase it. Since the producer is not dealing directly with the consumers it is difficult for him to ascertain. But the wholesaler is directly involved in trading with the retailers, and that affords him the opportunity of learning their choice. So when he learns he conveys it to the producer.

3. Financier: Due to his mass patronage of goods made by the producer there is high turnover, which results in high revenue. The company would this make lots of profits from that revenue. And more revenue would help the company to keep and increase the cycle of production.

4. Warehousing: He provides warehousing facilities to get rid of stockpiling at the production point. It is the place goods are kept until they are ready to be sold. If he does not buy from the producer and keep them in his own warehouse, the companies warehouse or store would eventually become filled. And then, they would not have a place to store more products. They would have to stop producing. But because he buys, particularly in large quantities, the store would always be empty, and when the company produces more, they would keep it there. 

5. Advertising: The wholesaler helps in advertising the products. For instance, if the company produces a new version of the product he sells to them, he would tell the retailer, and they would come to be aware of it. And possibly buy. 

6. Price: The wholesaler stocks the products he buys in bulk at his warehouse until he would sell them. This helps to prevent fluctuation of price until they are demanded.

7. Transporter: The wholesaler provides the transport used to convey the products he buys from the producer to his warehouse. Infact he does not stop there, but engages in distribution of the items from one retailer to the other. 

8. Market research: He engages in research on the needs of the retailers and supplies the information he gathers to the producer to help them meet their specification. 

9. Adviser: Due to the fact that he learns a lot about the retailers needs or complaints he can advise them on how to meet their needs 

10. Risk bearer: The wholesaler risks losing the products he purchases from the producer, and is affected by any uncertainties after purchase.

11. Sometimes the wholesaler brands the products he buys before he sells them. And he gives credit facilities tot he manufacturer, sometimes by paying upfront for the products. 

THE DUTIES OF THE WHOLESALER TO THE RETAILER

1. Supplier of goods. The producer produces goods. And after that he receives patronage from the wholesaler. If the wholesaler simply buys the products and keeps them to himself, the retailer would be in lack of it, but due to the fact that he sells to him it becomes available to him. He doesn't just sell one but varieties of them to him. Without him, therefore the retailer would always be in lack. That is why we call him provider of products to the retailer. 

2. Making products available in small quantities: The producer usually buys in large quantities. Then he sells them in small quantities to the retailers. Imagine that there are no wholesalers, then, the retailers perhaps unable to buy in large quantities directly from the producers would be void of small products. But whenever the wholesaler buys, he shares it into very small quantities and sells them. Thanks to him the retailer receives products in small quantities. 

3. Provision of products on credit basis. The retailer may want to buy goods and pay for it when he has money. Due to the fact that he lacks. If there is no one willing to sell to him on credit he cannot buy goods. The wholesaler plays this role very well. Usually he sells to him and gives him the option of paying him at an agreed time.

4. Advise to the retailer: He has more knowledge than the retailer on products, due to his access to he producer. Thus he could impart advise to him. 

5. He also conveys products from his warehouse to the store of the retailer. 

6. Grading and packaging of goods: When he buys he sometimes performs other roles. He sometimes brands, or repackages the products. Infact sometimes he puts touches to the product. When he finishes he would sell them to the retailer. 

7. Advertises goods. Directly he tells the retailer that the producer has made new products, then they learn about it's existence. Or sometimes when the retailers visits his warehouse they would discover new products and becomes aware of their availability. 

8. Bears risk. He bears the risk of fall in the price of goods on behalf of the retailer. He is also a link between the producer and the retailer. Through him the retailer can convey their needs and complaints to the manufacturers.

In summary the wholesaler is important because he indulges in bulk purchase and sells it to the retailer whom sells to the final consumers. As the retailers cannot take up this task, and without which there would be no product for the final consumers, due to the inability of them to buy directly, the wholesaler is thus a facilitator in the provision of goods not only tot he retailer but the entire public.