Sales and distribution management

1. WHOLESALERS
Channel Institutions:

2. Learning Objectives
• Understand functions of a wholesaler
• Understand various classes of wholesalers
• Understanding strategic issues in wholesale
• Learn about cash and carry wholesale
• Understand the benefits and limitations of wholesaling
• To understand about 1 type of wholesaler- The distributor
• Trends in wholesaling practicesa – distributor in more detail
s in wholesaling practices

3. Functions of Wholesalers
• Varies in degree between free-lance, company distributors
and stockists / agents
• Sales and promotion of chosen company products
• Buying the assortment of goods
• Breaking bulk to suit customer requirements
• Storage and protection of goods till sold

4. • Grading and packing of commodities
• Transportation of goods to customers
• Financing the buying of customers
• Bearing the risks associated with the business
• Collecting and disseminating market information to
both suppliers and customers

5. Types of Wholesalers
• Full service: stocking, selling, offering credit, delivery and
business assistance (company distributors, wholesale
merchants)
• Limited service: range of service is limited (examples include
Metro C&C, mail order)
• Merchant w/s: independent businesses
• Brokers and agents: bring buyer and seller together – do not
take possession of goods
• Others: agri business, auction companies etc

6. The Distributor
 Is a wholesaler nominated by a company to exclusively re-
distribute the company products to its customers in a
designated territory.
He does not deal in competitor’s products. Does not sell from
his premises. Extends credit selectively.
 A redistribution stockist for HULL
A distributor for Philips lighting division
A distributor for L&T engineering division

7. Managing Distributors
• The principles are similar across industry verticals.
FMCG is the most complex.
• Has the capacity to maximise sales and market shares.
• Has to ensure buying goods from the company and re-
distribution to the trade
• Distributor responsibilities include:
• Buying adequate quantities by Stock Keeping Unit
(SKU) for redistribution
• Ensuring full market coverage of all customers in the
territory assigned to him

8. Managing Distributors (cont)
• Help finance the operations – pays for the
goods upfront but extends credit to his
customers
• Maintaining inventory of company products
adequate at all times to service the market
• Assist company in its promotional efforts

9. Cash and carry Wholesalers
• Cash-and-carry wholesalers usually handle a limited line
of fast-moving merchandise, selling to smaller retailers
on a cash-only basis and not delivering goods.
• Cash and carry is a form of trade in which goods are sold from a wholesale warehouse
operated either on a self-service basis or on the basis of samples or a combination of the
three.
• Customers settle the invoice on the spot in cash and carry the goods away themselves.
• There are significant differences between "classical" sales at the wholesale stage and
the cash and carry wholesaler: namely cash and carry customers arrange the transport
of the goods themselves and pay for the goods in cash, and not on credit

10. Major Decisions
• Which markets to operate in
• Manpower to employ
• What products to sell
• Pricing decisions / Promotional support
• Credit and collections
• Image and customer perception
• Warehouse location and design
• Inventory Control

11. Limitations of Wholesalers
• Some of them do not give complete information to suppliers
for selfish reasons
• Cannot be relied on to do equitable distribution
• At times, do not want company and customers to meet
• Tend to hoard goods and influence pricing
• Consumers have no say in pricing or quality in a w/s
dominated system

12. Strategic issues of wholesaling
• Target market decisions
• Marketing mix decisions
• Products to offer
• Product pricing
• Product positioning
• Promotion placing

13. Trends shaping wholesaling
distribution
• Functional overlap
• Increased services
• Pricing & credit
• Regional coverage
• Organizational form & size

14. Key Learnings
• Wholesalers are required to reach hundreds of customers
and retailers
• Wholesaler business is usually B2B
• Wholesalers can be free-lance or appointed by companies –
like distributors
• Company distributors are bound by strict operating norms
• Future of wholesalers in India still seems favourable

15. REFERENCES
• Sales and Distribution Management: Krishna Havaldar &
Vasant Cavale (2012): McGraw Hill Higher Education: 2/e: Pg
343-370.
• Kotler, P., Armstrong, G., & Cunningham, M. H. (2012).
Principles of marketing. Toronto: Pearson Prentice Hall