List and explain five function of the wholesaler to the; (i) Supplier (ii) Retailer. – NABTEB QUESTION

The functions of wholesalers to the supplier are:

1. Information
2. Storage/ware housing
3. Preparing commodities.
4. Advertising and promotion
5. Financing
6. Quantity and bulk buying

EXPLANATIONS:

INFORMATION: The wholesaler gives useful information to the supplier in respect of the state of the market, such as changes in demand, as a result of price, taste or fashion.

STORAGE/WAREHOUSING: The wholesaler provides facilities for storing goods and thereby relieves the supplier of storage expenses.

PREPARING COMMODITIES: The wholesalers help to complete the process of production by labeling, packaging, branding and blending the goods he buys from the suppliers before selling them to the retailer

ADVERTISING AND PROMOTION: The wholesaler creates market for the supplier by means of various advertising methods such as trade, journals and catalogues

FINANCING: The wholesaler finances the supplier by paying for goods bought promptly or in advance.

QUANTITY OR BULK BUYING: The wholesaler buys in large quantity and thereby encourages the suppliers or producers to produce more and thus reap the advantages of large scale production

ii. The functions of wholesalers to retailers are:

1. Break bulk
2. Regular supply/warehousing
3. Credit/financing
4. Delivery/transport facilities
5. Advice/information
6. Varieties of goods
7. Stabilization of prices

EXPLANATIONS

BREAK BULK: The wholesaler breaks bulk by selling in small quantities to the retailer, this enables the retailer to carry small amount of goods which he can afford to pay for.

REGULAR SUPPLY/WAREHOUSING: The wholesaler store large quantities of goods in his ware house and thereby ensure that retailer has a regular supply of goods.

CREDIT/FINANCING: The wholesaler finances the retailer by granting him credit that is by allowing the retailer to buy goods and to make payments for such goods later.

DELIVERY/TRANSPORT FACILITIES: The wholesaler sometimes delivers goods and provides transport facilities for the delivery of goods to the retailer’s door.

ADVICE/INFORMATION: The wholesaler offers advice or information that keeps the retailer up to date with new trends concerning new goods and prices to be expected on the market.

VARIETIES OF GOODS: The wholesaler stores goods from different manufacturers and thus, avails the retailer of varieties of goods.

STABILIZATION OF PRICES: By storing goods in its ware houses and thus regulating supply, the wholesaler keeps prices fairly stable for the retailers.