Chapter 15 - Merchant wholesalers PDF

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Reading Notes Chapter #15 Part II...

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Merchant wholesalers: independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers, or retailers. ○ A producer is likely to rely on merchant wholesalers when selling directly to customers would be economically unfeasible. Merchant wholesalers are also useful for providing market coverage, marketing sales contacts, storing inventory, handling orders, collecting market information, and furnishing customer support. ● Full-service wholesalers: merchant wholesalers that perform the widest range of wholesaling functions. ○ Customers rely on them for product availability, suitable product assortment, breaking large quantities into smaller ones, financial assistance, and technical advice and service. They handle either consumer or business products and provide numerous marketing services to their customers. ● General-merchandise wholesalers: full service wholesalers with a wide product mix but limited depth within product lines ○ Ex. P&G ● Limited (General)-line wholesalers: full-service wholesalers that carry only a few product lines but many products within those lines ○ Ex. Selling Tide versus other brands

● Speciality-line wholesalers: full-service wholesalers that carry only a single product line or a few items within a product line ○ Ex. Fitbit ● Rack jobbers: full service, speciality-line wholesalers that own and maintain display racks in stores ○ Ex. L’oreal Employees stocking CVS shelves ● Limited-service wholesalers: merchant wholesalers that provide some services and specialize in a few functions ● Cash and carry wholesalers: limited service wholesalers whose customers pay cash and furnish transportation ○ Place where you could go buy a couch and bring it home ● Truck wholesalers: limited service wholesalers that transport products directly to customers for inspection and selection ● Drop shippers: limited service wholesalers that take title to goods and negotiate sales but never actually take possession of products ● Agents: intermediaries that represent either buyers or sellers on a permanent basis ● Brokers: intermediaries that bring buyers and sellers together temporarily ○ Agents and brokers enable manufacturers to expand sales when resources are limited, benefit from the services of a trained sales force, and hold down personal selling costs. ● Manufacturers’ agents: independent intermediaries that represent two or more sellers and usually

offer customers complete product lines ● Selling agents: intermediaries that market a whole product line or manufacturer's’ entire output ○ They perform every wholesaling activity except taking title to products. Selling agents usually assume the sales function for several producers simultaneously, and some firms may use them in place of a marketing department. ○ Unlike manufacturers’ agents, selling agents generally have no territorial limits and have complete authority over prices, promotion, and distribution. ● Commission merchants: agents that receive goods on consignment from local sellers and negotiate sales in large, central markets ○ They specialize in obtaining the best price possible under market conditions ○ Most ofen found in agricultural marketing ● Sales branches: manufacturer owned intermediaries that sell products and provide support services to the manufacturer’s sales force ○ Usually situated where large customers are concentrated and demand is high ● Sales ofces: manufacturer owned operations that provide services normally associated with agents ○ Don’t carry inventory ○ Manufacturers may set up these branches or ofces to reach their customers more effectively by performing wholesaling functions themselves. They might also set up such

a facility when specialized wholesaling services are not available through existing intermediaries....