Meaning:
The business men who sell huge amount of goods are called wholesalers. Wholesalers sell goods to retailers by purchasing huge amount from producers. In other word, the person who performs the wholesale trade is a wholesaler. Wholesalers work as a bridge between producers and retailers. Such intermediaries do not produce goods nor sell to ultimate consumers. The work of wholesaler, sometimes, may be done by producers or retailers. The producers work as wholesalers when they sell goods to industrial users, to government offices, to users, or other organizations.
Wholesalers invest much capital and make arrangement for necessary warehouse/storing. So, such wholesalers are known as big businessmen. Such businessmen have their own warehouse for storage, means of transport and modern communication system. So, wholesaler or businessmen purchase goods in mass quantities transport them, bear risk etc. Wholesalers may also provide credit facility to their customers.
Different experts and scholars have defined wholesalers; the important are given as follows:
Prof. William J. Stanton has defined wholesaler as, “Wholesaling or wholesale trade includes the sale and all activities directly incidental to the sale of product or service to those who are buying for purpose of resale or for business use.”
Prof. Philip Kotler has defined it as, “Wholesaling includes all activities involved in selling goods or services to those who are buying for purpose of resale or business use.”
Peter D. Bennet has defined it as, “Wholesalers are the merchants who buy products from producers or other wholesalers and release them to retailers, organizational buyers or to other wholesalers.”
Types of Wholesalers:
Wholesalers are of two types:
1. Agent Wholesaler
2. Trading Wholesaler
1. Agent wholesalers work as the wholesalers but do not take the ownership of products. They only facilitate wholesaling on the basis of commission. Under agent wholesaler commission house, there are limited numbers of brokers wholesalers, workers, agents, sales agent, producers’ agents, auction company etc.
2. Trading wholesalers take ownership by purchasing goods from producers. They conduct independent wholesale trading concern. Wholesalers include simple product wholesalers, simple line product wholesalers, and special product wholesalers.
Trading wholesaling includes five types of wholesalers such as full time workers, simple wholesalers, simple product line wholesalers, limited worker wholesalers, and postage order wholesalers, drop-shipment wholesalers and rack jobbers. Similarly, there are four types of wholesalers according to the extension of trade or on the basis of geographical region, such as local, regional, national and international. In this way, it becomes clear that the businessmen who sell goods/products to retailers, government and other organizations, and business users by purchasing in huge quantity from producers are called wholesalers. Sometimes producers and retailers also work as wholesalers. Wholesalers can be divided into different types on the basis of functional area and ownership. However, the main task feature of all types of wholesalers is to conduct wholesale trading.