Distribution - Wholesaling

1
Distribution - Wholesaling

• Distribution
• Middlemen
• Wholesale Trade
• Warehousing
• Setting up a Wholesale Business

2
Distribution

• Main functions

(1) ownership of goods transfer from Producers
to Consumers
(2) add value to products
(3) provide employment opportunities

• Purpose

right price
right time
right quantity
right place
product
3
Channels of Distribution

• Channel 1

Producer
Consumer

• Channel 2

Producer
Consumer
Retailer

• Channel 3

Producer
Consumer
Wholesaler
4

• Channel 4

P
C
W
R
Selling service and products
Store goods and distribute goods to retailer

• Channel 5

P
C
W
R
E
I
5
Choice of Distribution Channel

• Nature of product
• Cost of product
• Market
• Size of the order

6
Middlemen

• Who are Middlemen?
• Middlemen are organizations or people in the
  channel of distribution linking the producer and
  the consumer

7
Wholesale Trade
Provide trade credit
Breaks bulk
Store goods
Wholesaler
Provide advice
Deliver goods
Promotion
Bears risk
Provides choices
8
Types of Wholesalers
General
Full-function
Merchant wholesalers
Specialist
Limited function
Import/export
Retailers co-operative
Wholesalers
Industrial
Other distributors
Factors
Brokers
Agents
9
Warehousing

• Two types of warehouse
• storage warehouse
• distribution warehouse

10
Setting up a Wholesale Business

• Where should the business be located?
• What sort of premises are needed?
• What finance is needed?
• How should the operation be organized?