Chapter 15: Wholesaling

franchise wholesaling

A full-service merchant wholesaler format whereby independent retailers affiliate with an existing wholesaler to use a standardized storefront design, business format, name, and purchase system.

cash and carry wholesaling

A limited-service merchant wholesaler format in which people from small businesses drive to wholesalers, order products, and take them back to a store or business. No credit, delivery, merchandise, and promotional assistance are provided.

commission merchants

Agents that receive goods on consignment, accumulate them from local markets, and arrange for their sale in a central location.

limited service merchant wholesalers

Buy and take title to products, but do not perform all the functions of full-service merchant wholesalers. They may not provide credit, merchandising assistance, or marketing research data.

merchant wholesalers

Buy, take title, and take possession of products for further resale, may be full or limited service.

wholesale cooperatives

Full-service merchant wholesalers owned by member firms to economize functions and provide broad support. There are producer-owned and retailer-owned cooperatives.

general merchandise wholesalers

Full-service merchant wholesalers that carry a wide product assortment—nearly all the items needed by their customers.

specialty merchandise wholesalers

Full-service merchant wholesalers that concentrate on a rather narrow product range and have an extensive selection in that range.

rack jobbers

Full-service merchant wholesalers that furnish the racks or shelves on which products are displayed. They own the products on the racks, selling them on a consignment basis.

wholesaling

Includes buying and/or handling goods and services, and their subsequent resale to organizational users, retailers, and/or other wholesalers—but not the sale of significant volume to final consumers.

commercial stock brokers

Licensed sales representatives who advise business clients, take orders, and then acquire stocks and/or bonds for the clients. They may aid the firms selling the stocks or bonds, represent either buyers or sellers, and offer some credit.

drop shippers

Limited-service merchant wholesalers that buy goods from manufacturers or suppliers and arrange for their shipment to retailers or industrial users. They have legal ownership, but do not take physical possession of products and have no storage facilities.

truck/wagon wholesalers

Limited-service merchant wholesalers that generally have a regular sales route, offer items from a truck or wagon, and deliver goods when they are sold.

mail order wholesalers

Limited-service merchant wholesalers that use catalogs, instead of a personal sales force, to promote products and communicate with customers.

manufacturer/service provider wholesaling

Occurs when a producer does all wholesaling functions itself. It may be carried out via sales offices and/or branch offices.

full service merchant wholesalers

Perform a full range of distribution tasks. They provide trade credit, store and deliver products, offer merchandising and promotion assistance, have a personal sales force, offer research and planning support, pass along information to suppliers and customers, and give installation and repair services.

selling agents

Responsible for marketing the entire output of a manufacturer/service provider under a contractual agreement. They perform all wholesale tasks except taking title to products.

brokers

Temporary wholesalers, paid by a commission or fee, who introduce buyers and sellers and help complete transactions.

agents

Wholesalers that do not take title to products. They work for commissions or fees as payment for their services and are comprised of manufacturers'/service providers' agents, selling agents, and commission (factor) merchants.

manufacturer/service providers' agents

Work for several manufacturers/service providers and carry noncompetitive, complementary products in exclusive territories, may use many of them.

food brokers

introduce buyers and sellers of food and related general-merchandise items to one another and bring them together to complete a sale.