Risk Bearing Functions Of A Wholesaler

(7) Risk-Bearing: The wholesaler makes it possible for the retailer to carry a smaller stock by holding goods in readiness near the retailer and by offering prompt delivery. This reduces the risk with price changes. The wholesalers usually guarantee the merchandise they sell and the retailer can get immediate satisfaction on claims involving faulty or defective merchandise. A wholesaler reduces a manufacturer’s risk by buying ahead.

By storing goods the wholesaler reduces the producers’ risk from price changes, fashion shifts and physical deterioration. If the product deteriorates, goes out of fashion or for some other reason does not sell, the wholesaler usually bears the burden. By storing goods and granting credit to retailers, he also performs the risk-bearing function.

(8) Management Services and Advice : The wholesaler renders an important service to the customers by providing market information and general advice. By furnishing managerial services and advice, especially to retail customers, wholesalers have significantly solidified and strengthened their own position in the market. Some of the managerial services provided by wholesalers today include training of retail sales-clerk, advising on store displays and store layout, establishing better system of inventory control and accounting. The wholesaler also provides information to the retailers regarding price, market conditions, fashion trends, consumer demand, new items and special sales events scheduled manufacturers and other sources of supply.

The wholesaler can also advise the manufacturers. The wholesaler being in close touch with retailers who have close connection with the consumers is in a better position to forecast, stimulate, interpret the desire of the customers and to advice the producers regarding some changes in production.

9) Maintaining Price Stability: The wholesaler maintains a steady price by evening out price, movement. This is because he holds goods when the market is glutted with the goods due to over-production and releases stock when the market is rising.

(10) Supply of Best Products: The wholesaler through his long experience or purchasing goods, knows the producers who can supply him goods of the best quality and at the most favorable price. This sort of specialization enables him to help the retailers directly and the consumers indirectly by supplying the goods of best quality and at favorable price.

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