principles of business, marketing, and finance wholesalers in a private enterprise system copyright...

Principles of Business, Marketing, and FinancePrinciples of Business, Marketing, and Finance

Wholesalers in a Private Enterprise SystemWholesalers in a Private Enterprise System

Copyright © Texas Education Agency, 2011. All rights reserved

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Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1) Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the

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Manage the Middle

• Producers use wholesalers to reach all of the consumers in its target

market• Numerous retailers

• Easier for a retailer to work

with a wholesaler than

numerous producers


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Benefits of Wholesalers

• Provide important marketing services for the channels in which they participate

• Provide one or more of the needed marketing activities better or at a lower cost

• Combine the orders of several small retailers and purchases in efficient quantities

• Specialize in storage and inventory management

• Provide facilities for product storage that manufacturers do not have


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Buying

Selling

TransportingStoring

Financing

Wholesaling Activities


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Wholesaling Activities

• Accumulate products of many manufacturers, develop appropriate assortments for customers, and distribute the products to their customers

• Assist manufacturers in determining needs of retailers and final consumers and provide market information to retailers

• Collect and analyze information on sales, costs, changes in demand, and inventory levels

• Purchase products from producers and manufacturers and selling them to their customers

• Assume risk by investing money in products that may be damaged or destroyed


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Full-Service Wholesalers

• Take title to the products they sell• Provide a full range of distribution activities• Provide or arrange transportation services

• Offer Credit• Provide promotion assistance,

product research, information, product installation and repairCopyright © Texas Education Agency, 2011. All rights

reserved

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Limited-Service Wholesalers

• May not provide services such as research, credit, or promotional support

• Concentrate on one or two

important functions such as

warehousing and storage,

product delivery, or

accumulating products for

sale in a convenient location


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Locating

Suppliers

Selling

Financing

Extension of Workforce

Arranging

Shipment

Do Not Take Title to

Products

• Independent businesses• Provide specialized exchange functions

Agents and Brokers


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Other Wholesaling Businesses

• Wholesale franchises and cooperatives-groups of small businesses that affiliate because of the benefit gained from cooperating for marketing and distribution activities

• IGA• FTD• ACE Hardware


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Wholesale Member Clubs

• Sam’s and Costco• Open to final consumers and

businesses• Products displayed in large

warehouses

• Limited product assortments are available in large quantities• Customers must transport their purchased products


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Changing Role of Wholesalers

• Large retailer may prefer working directly with producers (such as a particular designer)

• There are more small- and medium-sized retailer and manufacturers than there are large businesses


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• Access to markets• Product awareness• Export and import organization -important in building international business• Better communications and information -improved technology, broader customer service• Work to identify their customers -understand their needs• Learn the problems the customers are having -with products and marketing activities and help them to

solve those problems

Changing Role of Wholesalers


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Specialized Services

• Marketing Research and Marketing Information Services• Provide Customers with Important Data• Computer Technology to Process Orders Quickly• New Methods for Storing and Handling Products to

Reduce Product Damage, Cost of Distribution, and Time Needed for Delivery

RFID applications in “smart mirrors” used in fitting rooms in department stores. RFID tags enable interrogation of database to find complementary items or locate other sizes or colors.


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Adding Customer Service

• Marketing and Promotional Planning

• 24-Hour Ordering and Emergency Deliveries

• Specialized Storage Facilities

• Individualized Branding and Packaging Services


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