16The Functions of Wholesale
Wholesalers are companies that buy products from various manufacturers and distribute these products to various retailers. Dealing with a single wholesaler lets manufacturers sell their products at various retailers, making it possible for retailers to have stocks of various products from different manufacturers.
To cut distribution costs, it's recently becoming more popular for manufacturers to deal directly with retailers. To resist this change, the wholesale business has been strengthening its various functions.
One of the functions they cover is information transfer. They provide information on best‐selling products to the manufacturers, and they provide the retailers with information related to sales promotion like information on new products or product features. They can fulfill this role because they have access to various information from various manufacturers and retailers. They also provide logistics by offering warehousing for manufacturers and transporting their products to retailers as needed. Wholesalers are indispensable for small manufacturers who will find it difficult to strike deals with big retailers.
Wholesalers also function as bearers of financial risk by stabilizing the cash flow for manufacturers and retailers as they wait until their products are sold.
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