Wholesaling and Retailing

1. CHAPTER 10
RETAILING AND WHOLESALING

2. Retailing and Wholesaling
 Definition of Retailing
 Functions of Retailers
 Definition of Wholesaling
 Functions of the Wholesalers
 Types of Wholesalers

3. What is Retailing?
 Retailing refers to the business activity of
selling goods or services to the final consumer.
 A retailer is one whose business firm sells
mainly to the final consumer. A retailer in
some cases sell on nonretail basis like
wholesale.

4. Functions of RETAILERS
 1. They provide convenience;
 2. They provide guarantee and service;
 3. They provide financing of transactions;
 4. They perform promotional activities.
 5. They storage function;
 6. They perform intelligence service for the manufacturer; and
 7. They serve as buying agent consumers.

5. CONVENIENCE
 Most retailers are located very near to the ultimate
consumers. This spares the consumer from having to
travel very far to find a retailer selling the required
product services.
 Retailers operate at hours most convenient to the
consumers. Most sari-sari stores open from 6:00 AM to
9:00 PM. Gasoline stands on the retail operations on a 24
hour basis, seven days a week.

6. GUARANTEE AND SERVICE
Manufacturers and wholesalers sometimes sell
directly to consumers. Most often, they are not in a
position to satisfy immediate requests for service and
product guarantees.
This is not so with the retailers. With accessibility, the
retailer can immediate replace a defective product, or
perform services like installing the purchased item.

7. FINANCING
A great number of retailing institutions
provide financing by selling on credit terms.
Some retail stores collect from customers on a
monthly billing basis. This functions relieves the
manufacturer from having to tie up his limited
funds in activities like retail financing.

8. PROMOTION
Retailers perform promotional activities to
stimulate sales. The effective display of
products, for instance, increases the chance of
making sales.

9. STORAGE
With the service provided by the retailers, the consumers are
relieved from buying product which are not yet needed.
Without the retailers the consumers will be forced to buy in
advance from manufactures. This action will force the consumers
to store the product. If customers are not willing to assume the
storage function, the manufacturer will have to absorb it or
forego production altogether.

10. INTELLIGENCE
The manufacturers, most often, do not have the
facility to monitor information from individual
consumers. Since the retailers are directly in touch with
the consumers, the retailers are in a better position to
gather information which could be relayed later to the
manufacturers. This, in effect, makes the retailers
intelligence agents of the manufacturers.

11. BUYING AGENTS
Many consumers have limited shopping time especially if
it means selecting from among thousands of products
coming out of the factories. The retailers who have the time,
the skill, and the bargaining power, perform task of selecting
the products and making them available for purchase by the
consumers in more convenient locations like the stores. This,
in effect makes the retailers perform the role of buying
agents of the consumers.

12. TYPES OF RETAILERS
 Retailers may be classified according to the following:
1. By sales volume
2. By product mix
3. By form of ownership
4. By method of operation

13. SALES VOLUME
 According to the Sales Volume Retail stores may be classified as
1. Small:
2. Medium:
3. Large
This classification does not include the micro enterprises operating all over
the Philippines

14. PRODUCT MIX OFFERED
 Retailers may also be classified based on the product
lines they carry. They may be categorized into:
1. General merchandise stores
2. Specialty sores

15. FORM OF OWNERSHIP
 Retail stores operate under any of the various forms
of ownership. They may either be:
1. Corporate chain stores.
2. Independent stores
3. Franchise stores.

16. METHOD OF OPERATIONS
 Retailers also vary according to their method of operation. They may
either be
1. Full service retailers
2. Supermarkets
3. Discount stores
4. Nonstore retailers
 Home retailers
 Telephone retailers
 Vending machine retailers
 Mail order retailers
 Internet retailers
 Cell phone service retailers

17. What is Wholesaling?
 Wholesaling refers to all activities involved in
selling goods and services to those who intend to
resell or use the same for producing goods or
services.
 The wholesaler is the one who perform
wholesaling activities.

18.  The wholesale may be called as such depending on the
intention of the buyer. The following transactions are
considered wholesale:
1. The sale of a computer unit for office use
2. The sale of sugars as raw materials for candies
3. the sale of an electric guitar to a professional guitarist
4. The sale of janitorial services to a office
5. The sale of a bus to the transportation company
6. The sale of books to a university
7. The sale of vegetables to a retailer

19. FUNCTIONS OF WHOLESALER
 Wholesalers serve as important links between the manufacturers and
retailers. They perform all or any of the following:
1. Anticipating customers needs
2. Selling promotion
3. Financing
4. Storage
5. Breaking bulk
6. Transportation
7. Risk taking

20. TYPES OF WHOLESALERS
 Wholesalers may be classified according to the
functions they perform. They are either;
1. Full function wholesalers
 Merchant wholesalers
 Sales offices and branches
 Agents
 Brokers and commission houses

21. 2. limited function wholesalers
 Drop shippers
 Truck distributors
 Mail-order wholesalers
 Cash-and-carry wholesalers
 Cooperatives
 Rack jobbers

22. 3. Industrial wholesalers
 Those also serving the retailers
- sales branches
- brokers
- manufacturers agents
- combination houses
 Industrial distributors serving only the industrial
market
- general line wholesalers
- specialty line wholesalers