The Advantages & Disadvantages of Wholesalers
Wholesalers have been the big thing in this past era. They are the prime route for manufactured products to arrive at the retail market. They act as a bridge between the manufacturer and the retailer.
Wholesalers buy goods from the manufacturers in large quantities and their major clients are retailers who buy products in bulk. But they do not necessarily sell only to retailers. They also sell to distributors or to other smaller sellers.
Kapil Sharma in his book "Marketing Management: How to Create, Win & Dominate Markets" states that wholesalers exist in various formats, offer diversified features and thus affect a wider range of industries. Wholesalers can deal in a whole variety of different products, giving them greater exposure to the market and greater market share. This enables wholesalers to attract a wider customer range while it gives customers the opportunity to fulfil multiple requirements at a single place.
The rapid increase in the use of the Internet for selling and purchasing has led to a decrease in the importance of wholesalers, since the buyers are more easily able to communicate with the manufacturers. Consumers can now directly place orders and receive goods from the source. This is alarming for the wholesale industry as it faces a threat of being superseded by online purchasing. Also, this business has its own insecurities. Some wholesalers do not sell products to groups or societies fearing that they might sell their products ahead to customers that operate privately.
In today's economy, wholesalers are facing a rapid increase in costs, which is widespread. Land, buildings and other storage locations are getting expensive by the day. While transport costs are on a global rise due to swelling fuel costs, many businesses are adapting modern techniques to overcome these problems. But acquiring current gadgets and implementing new systems can be very expensive and might not be cost-effective in some cases.
Like every business, wholesaling comes with its highs and lows. It might seemingly be getting outdated but its effectiveness cannot be denied. Although the rise of supermarkets around the world has affected the wholesale business massively where they purchase goods from the manufacturer directly, the wholesale business still flourishes. Wholesalers can specifically target the environments where modernised purchasing methods are not yet in regular practice. There still are ample regions where e-buying and online shopping is not common and retailers and consumers cannot buy directly from the manufacturers.
- "Marketing Management: How to Create, Win and Dominate Markets"; Kapil Sharma; 2009
- "Retail Product Management"; Rosemary Varley; 2006
- "KnowThis: Marketing Basics"; Paul Christ; 2008
- Photos.com/Photos.com/Getty Images