Wholesaling and Physical Distribution

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Wholesaling and Physical Distribution

• John T. Drea, DBA
• Professor of Marketing
• Western Illinois University

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Logistics is a critical element of success for
most businesses

• Logistics physical distribution
• Activities
• Order processing
• Inventory management
• Materials planning
• Warehousing
• Transportation
• These activities either help to
• create form utility
• create place utility
• reduce operational expenses

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Types of wholesalers
Merchant Wholesalers (takes title to goods, buy
and resell to other wholesalers and retailers)
Agents and Brokers (Do not take title to goods,
negotiates exchanges between buyers and sellers)

• Full-service wholesalers
• General-merchandise
• Limited-line
• Specialty-line (inc. rack jobbers)

• Agents (more permanent)
• Manufacturers Agent
• Selling Agent
• Commission Merchant

• Limited-service wholesalers
• Cash-and carry wholesaler
• Truck wholesaler
• Drop shipper
• Catalog/mail order/Internet

• Brokers (temporary)
• ex Real estate

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Which type of wholesaler do you need?
Situation
You need a
You operate a drug store, and you need someone to
handle all of your health and beauty aids and
over the counter drugs.
You operate a C-store, and youve been having
trouble getting financing for purchases from
wholesalers - you need to replenish basic items
such as groceries.
You operate a small manufacturing company that
makes faucets, and you need to get the product
into Home Depot and to major contractors.
A coal mine has 1,000 tons of coal on the ground
and needs to fins a buyer.
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Logistics objectives

• Meeting standards of customer service
• Reducing total distribution costs
• Reducing cycle time
• One of the common ways to deal with these
  objectives is to outsource logistics functions
• Freight forwarders
• 3PL Brokers

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Modes of transportation