Distribution - Wholesaling Middlemen Wholesale Trade Warehousing Setting up a Wholesale Business

Distribution Main functions: Purpose: (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

Channels of Distribution Producer Consumer Channel 2 Producer Retailer Consumer Channel 3 Producer Wholesaler Consumer

Channel 4 Channel 5 P W R C P E I W R C Selling service and products Store goods and distribute goods to retailer Channel 5 P E I W R C

Choice of Distribution Channel Nature of product Cost of product Market Size of the order

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

Wholesale Trade Wholesaler Provide trade credit Breaks bulk Store goods Wholesaler Provide advice Deliver goods Promotion Bears risk Provides choices

Types of Wholesalers Merchant wholesalers Retailers’ Wholesalers General Full-function Merchant wholesalers Specialist Limited function Import/export Retailers’ co-operative Wholesalers Industrial Other distributors Factors Brokers Agents

Warehousing Two types of warehouse: storage warehouse distribution warehouse

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?