2.1.2.1 Wholesaler Categories
Completion requirements
Merchant wholesalers are independently-owned businesses that purchase products for resale. When producers sell many products to many retailers, producers use merchant wholesalers. There are two types of merchant wholesalers.
Full-service merchant wholesalers provide large numbers of additional services to their customers (e.g., financial assistance, technical support, store design, advertising, etc.).
Limited-service merchant wholesalers provide fewer marketing services and are less specialized. They have lower costs and smaller profit margins than do full-service merchant wholesalers.
Full-service merchant wholesalers provide large numbers of additional services to their customers (e.g., financial assistance, technical support, store design, advertising, etc.).
Limited-service merchant wholesalers provide fewer marketing services and are less specialized. They have lower costs and smaller profit margins than do full-service merchant wholesalers.
Merchandise wholesalers are differentiated by the number and types of products with which they deal.
General merchandise wholesalers are full-service wholesalers that deal with a wide mix of products. They may carry a few products from a large number of different product lines (e.g., a corner convenience store may carry only five or six types chocolate bars from the entire Cadbury'sĀ® line). They work well for smaller stores.
Limited-line wholesalers are full-service wholesalers also. They carry a large number of products within just a few product lines (e.g., a candy story may carry all of the chocolate bars from the Cadbury'sĀ® line). Limited-line wholesalers serve limited-line retailers.
Specialty-line wholesalers are full-service wholesalers that distribute the smallest variety of products. They provide additional assistance to their customers by setting up store displays and offering extensive product knowledge.
Rack jobbers are specialty-line, full-service wholesalers that own display racks in retail stores. Usually, they buy their products on consignment from producers and set up their own displays. They deal with non-food items such as books and housewares. The items they sell tend to have a high profit margins.
General merchandise wholesalers are full-service wholesalers that deal with a wide mix of products. They may carry a few products from a large number of different product lines (e.g., a corner convenience store may carry only five or six types chocolate bars from the entire Cadbury'sĀ® line). They work well for smaller stores.
Limited-line wholesalers are full-service wholesalers also. They carry a large number of products within just a few product lines (e.g., a candy story may carry all of the chocolate bars from the Cadbury'sĀ® line). Limited-line wholesalers serve limited-line retailers.
Specialty-line wholesalers are full-service wholesalers that distribute the smallest variety of products. They provide additional assistance to their customers by setting up store displays and offering extensive product knowledge.
Rack jobbers are specialty-line, full-service wholesalers that own display racks in retail stores. Usually, they buy their products on consignment from producers and set up their own displays. They deal with non-food items such as books and housewares. The items they sell tend to have a high profit margins.
Transport wholesalers are classified according to how they transport the products they've purchased.
Cash and carry wholesalers pay cash for and transport products themselves. They are limited service wholesalers. The products they sell are cheap and readily accessible.
Truck wholesalers carry a limited line of products and take their products directly to their customers. The customers then decide whether to buy the products, and they pay immediately. This process is common with perishable goods (e.g., foods or flowers). Truck wholesalers are classified as limited service. They do not extend credit.
Cash and carry wholesalers pay cash for and transport products themselves. They are limited service wholesalers. The products they sell are cheap and readily accessible.
Truck wholesalers carry a limited line of products and take their products directly to their customers. The customers then decide whether to buy the products, and they pay immediately. This process is common with perishable goods (e.g., foods or flowers). Truck wholesalers are classified as limited service. They do not extend credit.
Other wholesalers include drop shippers and mail-order wholesalers.
Drop shippers purchase goods and sell them, but they never take actual possession of those goods. They arrange only to ship products from producer to retailer. Drop shippers take full responsibility for these products, and assume any losses. Drop shippers are limited-service wholesalers, with very low operating costs.
Mail order wholesalers design catalogues that show retailers the products available. This wholesale method is useful for specialty products (e.g., doll clothes, collector plates). Products are delivered by mail or courier.
Drop shippers purchase goods and sell them, but they never take actual possession of those goods. They arrange only to ship products from producer to retailer. Drop shippers take full responsibility for these products, and assume any losses. Drop shippers are limited-service wholesalers, with very low operating costs.
Mail order wholesalers design catalogues that show retailers the products available. This wholesale method is useful for specialty products (e.g., doll clothes, collector plates). Products are delivered by mail or courier.