Wholesalers purchase goods in bulk from manufacturers and sell in smaller quantities to retailers. They bridge the gap between producers and retailers. Key functions include buying and storing goods, distributing to retailers, providing financial assistance to retailers, and gathering market information. Performance is evaluated based on metrics like achieving sales targets, secondary sales, stock levels, handling promotions, and timely reporting. Developing rural markets involves expanding outlet coverage, acquiring new accounts, tracking secondary sales, monitoring competition, and managing damaged goods.

1. Wholesale
Concept
• Wholesale means to sell goods in relatively large
quantities.
• The wholesalers buys goods and commodities in large
quantities for further selling them in small quantities to the
retailers.
• According to Cundiff and Still “Wholesalers buy and sell
merchandise to retailer and other merchants and to
industrial, institutional and commercial users, but do not sell
in significant amount to ultimate consumer

2. Characteristics
• Vital link between the manufacturer and the
retailer.
• Buys in bulk quantities from the manufacture
and resells them to the retailers in small
quantities.
• Deals with limited no. of products.
• Wholesaler operates in a specific area

3. Wholesaler-Producer Service
• It is possible for the producers to go for the
large scale manufacturing
• It reduces administrative and financial burden
of the producers by bearing above costs.
• Manufacturers can cover wide area with help
of wholesaler.
• Provides Valuable information in the strategic
planning by the producer.
• Helps in avoiding stocks out.

4. Wholesaler-retailer
• The gap between the producer’s offerings and
retailers expectation is bridged by the
wholesaler.
• Provide necessary supports to retailer.
• Risk and investment at retailer level is
substantially reduced.
• Helps retailer by providing P-O-P materials.

5. Wholesaler-Consumer
• Variety of products for consumer, is possible
through support of wholesaler.
• Consumers are benefited with price stability.
• Market information provided by wholesalers
helps consumer in decision making.

6. MAJOR WHOLESALING DECISIONS
1. Which Markets to operate in?
2. Manpower
3. Which Produce to Sell?
4. Promotional Support
5. Credit and Collections
6. Image and Customer Perception
7. Warehouse Locations and Design
8. Inventory Control

7. Types of wholesaler
1. Merchant Wholesalers
2. Brokers
3. Manufacturers's Agents

8. Merchant Wholesalers
• Merchant wholesalers are the most common type
• They buy their wares directly from the manufacturer,
usually in huge lots, and then turn around and sell
these products to various retailers around the
country.
Two types of merchant wholesaler
1. Full service merchant wholesaler
2. Limited-service merchant wholesaler

9. Brokers
• Brokers essentially act as middlemen between
the manufacturer and the retailer, but they do
not usually take possession of the goods,
which sets them apart from more traditional
wholesalers.
• Brokers act on a commission basis and work
for clients in the manufacturing business.

10. Manufacturers's Agents
• Manufacturers's agents work directly for the
manufacturer, in their sales office.
• run by the manufacturing company, but are
almost always located separately from the
manufacturing plant.

11. Functions of wholesaler
• Buying of goods in large quantities from producers
and selling the same in small quantities to retailers is
termed as wholesale trade and the person who
carries on wholesale trade is called the "Wholesaler".
• He assembles varieties of goods from different
producers and store in his godown
• He stores the assembled goods in proper warehouse
till the goods are sold
• He distributes the assembled goods to the retailer or
to the consumer directly. He thus helps in the
dispersion process of marketing

12. Functions contd….
• He helps in the transportation of goods form
the place of production to his godown and to
the retailer.
• He provides financial assistance to the
retailers by supplying products on credit
• He involves all the risks associated with the
ownership as he makes bulk purchases and
makes arrangement for assembling and
warehousing

13. DISTRIBUTORS

14. Definition
A distributor is a whole seller nominated by a company to most
times exclusively re- distribute the company products to all
retailers and institutions is a designated territory.
Need for a distributor
A distributor may be required under three circumstances:
a. For entering into a new town.
b. For additional coverage in the same town
c. For replacing an existing distributor.

15. Expectations from the distributors
This is to be defined right at the beginning so that the
prospective candidates can be advised and secondly to get the
right kind of distributors. The expectations are:
 achieving sales target in volume, value and brand packs.
Financial commitment for inventory and credit to be extended in the
market.
Investment in infrastructure- storage space, vehicles for distribution.
Man power for selling and handling the office records, and reports.
Developing new markets and new accounts.
Managing key accounts and institutional business.

16. Effectively handling promotions and schemes initiated by the company.
Managing damaged stocks.
Organizing and participating in promotional events.
Handling customer quality complaints.
New products and pack sizes launching- assisting the company
Merchandising and displaying in the market.
Effectively handling promotions and schemes initiated by the company.
Managing damaged stocks.

17. Selection of distributors
Distributors selection involves some of these steps.
Based on company requirements, identifying two or three
prospects for each appointment necessary.
Background check on each short listed candidates.
Meeting the prospects, explaining to them what is
required and finding out their interest level.
After getting all this information, the salespeople have to
be shortlisted one or two final candidates with whom the
dialogue can continue.
Final selection could be made on qualitative and
quantitative factors like, willingsness/eagerness, confidence
etc.

18. Security deposits
Most companies take deposits from the distributors before
appointing him.
The security deposit has to be paid as a demand draft and not
as a bank guarantee.
The security deposit is to protect company against any payment
defaults by the distributors.
Payment by the distributors
The distributor is required to keep about 10 pre signed blank
cheques with the company.
On every dispatch of goods to the depositor, the value of the
goods is immediately entered in one of the cheque and deposit
into the bank account of the company.

19. Investment in inventory
The distributor is required to maintain a certain level of the
company goods in inventory
The level of inventory is about two weeks of saleable physical
stocks.
The salespeople should monitor this inventory holding and
not let it go down for any reason
Investment in infrastructure
The distributor has to invest in a storage space with a
capacity for at least one month of average sales, man-power
for selling and collection and keeping the accounts etc.
All the infrastructure is to be built up at the start of the
operation and not on installment.

20. Manpower
The distributor should also have adequate number of
salespeople to cover the market as per the agreed plan.
these salesmen are in the payroll of the distributor but selected
by the company along with the distributors.
Coverage of market
The territory of the distributor is defined by the company along
with the distributor.
Once the territory is defined, the number of outlets to be
covered in the territory would be known.
The beat plan decides the day, frequency and the market to be
visited and the number of outlets to be covered each day.
The distributor is required to cover attached market/village and
this will be specified while assigning the territory to the
distributor.

21. DEVELOPING RURAL MARKETS
•The distributor is expected to develop all interior markets within
about 20-25 kms of radius of his location.
•Some of these markets may not initially be on the beat plan of the
distributor, but as his business stabilizes & his sales people are able
to work the markets better, he would start looking at these
additional markets within the time allotted by him for his territory
coverage.
•HLL used operation “Harvest” to seed rural market.

22. Determinants for developing rural
marketing
1. Outlet coverage
Important tasks to be performed:
• Width of distribution
• The depth of the distribution
• Merchandising
FIFO(first in first out) should be followed

23. 2. New Accounts
• In every market, new outlets keep getting
opened regularly.
• The distributor salesmen have to keep track
of these & automatically cover them without
being prompted by the company salespeople
every time.
• If the number of outlets is more, or a big
super market comes in, there may be a
revision required in the beat plan itself which
the company sales people can be requested
to take care of.

24. 3. Secondary sales effort & tracking
• A secondary sale is the sale that the
distributor makes to his customer- both
retailer & institutions with or without the
direct involvement of the company sales
personnel
• It gives the right measurement of how well
the company products are accepted in the
market & determine the market share of the
products & is critical to be measured regularly.
• The distributor will buy more only if the 2ndry
sales happen regularly.

25. 4. Competition tracking
• The distributor is in the best position to
inform the company about all the current &
proposed activities of the competitors in the
market place.
5. Handling product promotions
• Display schemes
• Free offers or discounts on some products
• Sales contest
• Trade promotion

26. 6. Managing damaged goods
• Distributors may take back the damaged
stocks from influential retailers .
• All damaged stocks are a cost to the company
& have to carefully handled by the distributors
to reduce losses.
• The distributors will either destroy or dispose
off at reduced prices all such stocks after
getting the permission of the sales person of
the company.

27. 7. Attending to consumer complaint
• Retailer is the first point of contact for
consumer complaint
• Written complaint required
• Along with name, address & the reason
8. Organizing & participating the promotional
events
• Trade fairs ,melas
• Home-to-home selling campaigns
• Special merchandising efforts
• Promotional sales in chosen retail counters

28. Motivational Tools For Distributors
• Regular visits of the company
• Secondary sales target achieving –incentives
• Quantity purchase discounts
• Sales contests
• Extending credit
• Inviting in important company meetings
• Organizing parties
• Sales contests for distributor salesman

29. Performance Evaluation Of The
Distributors
• To be conducted in every 6 months
• Parameters of evaluation should be known to all the
distributors
• Some parameters are:
- Secondary sales
- Handling promos & events
- Stock levels
- Handling market complaints
- Feedback from retailers
- Timely submission of reports
- Effort on new products/packs