Chapter 13 - Retailing and Wholesaling

9 channel functions performed by full-service wholesalers

-selling and promotion (more contacts and more trusted) -buying and assortment building -bulk breaking -warehousing (hold inventories) -transportation (quicker delivery because are closer to buyers than producers) -financing -risk bearing (taking title) -market information (about competitors, new products, and price developments) -management services and advice (training, displays, etc.)

Wheel-of-retailing concept

a concept that suggests new types of retailers usually begin a low-margin, low-price, low-status operations but later evolve into higher-price, higher-service operations eventually becoming like the conventional retailers they replaced

Broker

a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation a limited-service wholesaler

Agent

a wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods a limited-service wholesaler

Wholesaling

all the activities involved in selling goods and services to those buying for resale or business use

Retailing

all the activities involved in selling goods or services directly to final consumers for their personal, non-business use

Merchant wholesaler

an independently owned wholesale business that takes title to the merchandise it handles

Limited-service (merchant) wholesalers

offer fewer services to their suppliers and customers

Full-service (merchant) wholesalers

provide a full set of wholesaling services

Industrial distributors

sell to manufacturers rather than retailers merchant wholesalers; may be full or limited service carry a narrow or full line of products (a broad range of merchandise, a general line, or a specialty line) several services - carry stock, offer credit, provide delivery

Rack jobbers

serve grocery and drug retailers, mostly in non-food items; send delivery trucks to stores, where the delivery people set up toys, paperbacks, hardware items, health and beauty aids, or other items; price the goods, keep them fresh, set up point-of-purchase displays, and keep inventory records (limited-service merchant wholesalers)

Drop shippers

take title but do not take physical possession (limited-service merchant wholesalers) do not carry inventory or handle the product; on receiving an order, they select a manufacturer, who then ships the merchandise directly to the customer; operate in bulk industries, such as coal, lumber, and heavy equipment