The wholesaler buys goods in large quantities directly from producers and sells them primarily to retail store owners. The store keeper then sells individual items to customers. By providing the retailer easier access to a variety of products, the wholesaler makes buying easier for the retailer and acts as a vital part in the smooth and effective flow of commerce.
Up until a little over 100 years ago, the buying and selling of merchandise was relatively uncomplicated. Retail store owners would travel to major seaports and manufacturing centers once or twice a year to purchase new products for later resale. Industrial concerns usually manufactured or purchased locally components for the goods that they produced.
The earliest wholesalers in the United States were probably the ship chandlers in New England who assembled goods required by merchant and military ships. Ship owners found that a specialized and centralized supply source enabled them to equip vessels quickly and send them back out to sea.
With the introduction of mass production and mass marketing techniques in the nineteenth century, wholesaling became a vital component of the buying and selling process which is part of the sales business development jobs. Without wholesalers, manufacturers would have had to deal with large numbers of retail store owners or individual buyers, and retail store owners and individual buyers would have likewise have had to deal with large numbers of manufacturers.
The need for wholesalers grew as industrialization changed U.S. manufacturing capacities and consumer tastes and more complex retail establishments replaced general stores. Individual manufacturers found they could sell things for more reasonable prices through the use of a wholesaler. Purchasers of goods found it more convenient to deal with a few sources of supply than hundreds of organizations. As an integral part of the system of production, distribution, and merchandising of goods, wholesalers play an important role in the economic system that allows consumers to purchase what they want or need. Moving the product from the supplier to the customer destination is the lifeblood of the wholesaling business. This includes warehousing, purchasing, transportation, and order processing.
In their business development careers, there are actually three main types of wholesalers - merchant wholesalers, manufacturers’ sales branches, and merchandise agents and brokers. Merchant wholesalers buy large quantities of merchandise from manufacturers, process and store that merchandise until needed, and then redistribute it to retail shop owners and others. Merchant wholesalers operate as independent businesses. They make their profit from the markup in price they add to goods as they sell them. Merchant wholesalers comprise the largest number of wholesalers and are responsible for a great percentage of the total sales in the industry.
Manufacturers’ sales branches are another important component of the wholesaling industry. Manufacturer’s branches are businesses established by manufacturers to sell directly to retail shop owners. These branches allow the manufacturers’ sales branches tend to be set up by large manufacturers. Moreover, a third type of wholesaler, merchandise agents and brokers, represent either the buyer or the seller in a transaction. Unlike the manufacturer’s sales branches or the merchant wholesalers’ sales branches or the merchant wholesalers, the agents and brokers do not buy or take direct control of the goods being sold. Rather, they act as intermediaries for either the buyer or seller. As representatives of businesses that buy or sell products, agents and brokers receive commissions for their services. Agents often contract with a manufacturer to sell a product or group of products to retail stores, industrial plants, and local distributors in a specific geographic region. They often represent more than one manufacturer.
Wholesalers may provide full-service or limited service. Full-service wholesalers operate warehouses, supply credit, employ sales workers, and make deliveries. They also might be involved with advertising, packaging, and providing other services to customers.
Limited-service wholesalers, on the other hand, may only ship merchandise from the manufacturer to the retailer or sell and deliver merchandise directly from their truck. Limited service wholesalers are smaller operations but can often deliver products at a lower cost. Wholesalers are experts in their particular line of work, even on business manager jobs. They must know everything there is to know about their product and also keep up to date on what competing wholesalers are doing. Note that numerous workers in the wholesale industry are salespeople, either they work in an office and others in the field areas assigned to them.
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