Characteristics of wholesaler.

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1.They sells on trade price .

They sell on trade price , ( Trade price is the retailer’s purchase price fixed by the manufacturer) and earn a margin on it. In general manufacturer decides trade price of a product and all the calculations of FMCG are done on trade price only. Wholesaler gets a discount or margin on trade price. Normally wholesaler sells to retailer on trade price only.

2.Get together point of retailer.

Retailers comes to the wholesaler point for their stock purchase from different location. Manufacturer cannot reach to micro interior location, from these location retailer comes to the wholesale market.

3.They don’t manufacture .

Most of the wholesaler don’t manufacture the product they sell. They purchase from distributor and focus on sell and delivery. Also it is not possible for a wholesaler to manufacture all the goods they sell. Hence it is better to purchase from manufacturer/distributor , and focus on sale only.

4.Buy in large quantity.

Wholesaler in general purchase in large quantity from the distributor/manufacturer.

5. Deals in a few types of product.

Wholesaler deals in a few types of product, but in large quantity.

6.Does not sell to the end user.

In general wholesaler does not sell goods to the consumer, because they prefers in large quantity sale . Individual consumer need small quantity, hence wholesaler don’t prefers them.

7.They provides credit facility to the retailer.

Wholesaler provides credit facility to the small retailer. It gives extra business volume to the wholesaler /distributor and retailer. Some retailer’s financial position are not strong , so they get benefited from wholesaler. These retailer can run their business smoothly with the help of wholesaler’s finance.

8.Low profit margin.

Wholesaler in general operates on low profit margin but high volume. This channel is lowest margin earner in the entire distribution channel. They plays with big volume , rather than on big margin percentage . Also because of high rotation they earn a good profit volume.

9. Market information.

Wholesaler collects market information about new product, trade discount, trade scheme and promotion and passes it to the retailer.

Again he collects information regarding consumer demand, market trend, competitor’s activity and passes it to manufacturer.

Also all the company sales persons, like ASM and Sales officer, visits wholesale market frequently and exchange information.

10. More competitive than retailer.

Generally wholesaler face more competition than retailer. Because wholesaler operates their business from whole sell market ,or in a same location there are multiple wholesale outlets are found. In other side retailer remains in spread out position and face less competition. Suppose in a retail shop if the shopkeeper asks a little more price than market, the consumer will not move to the nearby outlet. But in a wholesale shop , if shopkeeper asks for slight more price than the market, the retailer will move to the nearby outlet.

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