A wholesaler performs the following functions:
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1. Assembling:
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The wholesaler buys different goods from different manufacturers and assembles them in his warehouse for the purpose of selling it to the retailers.
2. Storage:
After arranging and assembling the products procured from the producers, wholesaler stores them in his warehouse. The products assembled and kept in stock by the wholesaler are distributed in desired quantities as and when required by the retailers.
Since there is always a time-lag between production of an item and its final consumption, the manufactured goods are to be stored carefully till they are needed by the retailers. Thus, wholesaler ensures proper storage in order to save the goods from deterioration and also to make these goods available when they are needed.
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3. Grading and packing:
The wholesaler does the job of grading by sorting out goods according to their quality and then packs them in appropriate containers suitable for sale to the consumers.
4. Facilitating disbursement of goods and sales:
Wholesalers sell their goods to the retailers who are scattered far and wide. Retailers approach them for further replenishment when their stocks are exhausted. At this stage, wholesalers come forward to help the retailers by providing requisite quantity and quality of goods needed by them. Thus, wholesalers help manufacturers in distribution as well as selling of goods and commodities.
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5. Transportation:
Wholesalers provide transportation facility to retailers by transporting goods and commodities from their warehouses to the retailer’s shop. Further, since wholesalers buy goods in large quantities, they can avail, economy in freight on bulk purchases, (e.g. transportation cost can be minimized)
6. Financing:
Wholesalers provide financial assistance like credit facilities to the retailers as and when they are in need of it.
7. Risk bearing:
Wholesaler takes the risk by taking ownership of the goods. They also assume all risks of failure to sell goods and of change in the prices of goods due to change in demand. Thus, wholesalers bear all the trade and financial risks of the business.
8. Provide Market Information:
Wholesalers provide valuable market information regarding the trends and changes prevailing in the market both to the producers as well as to the retailers. The retailers are informed about the quality and type of goods available in the market for sale, whereas producers are informed regarding the changes in tastes, and fashions of the consumers. This enables the producers to produce the goods in conformity with the taste and fashion of the consumers.