 I welcome you all to this video lecture on wholesaling. So this unit is a part of your fourth semester marketing specialization course and the name of the course is your sales and distribution and supply chain management which is in your MBA fourth semester program. So after going through this unit you will be able to define the concept of wholesaling then explain the importance of wholesaling then we will discuss various types of wholesalers then we will explain the functions of wholesalers and at the end of this video lecture we will discuss the latest trends in wholesaling. So in this video lecture we are going to discuss about wholesaling. So what is wholesaling? Wholesaling is the sale and distribution of goods to specific customer types such as those are most commonly referred to as retailers. Then retailers are the persons who will resell the goods to an end user that means to the customers. So we will discuss about retailers in the next unit. Generally in wholesaling activity the buying or selling of goods takes place in large amounts especially in order to sell them in shops or supermarkets compared to like retailing. In this video lecture we will briefly discuss in various types and functions of wholesaling and the latest trends in wholesaling. So before discussing the concept of wholesaling we should first know what is channel of distribution and why wholesaling is important part in this channel of distribution. So in a channel of distribution channel of distribution means when from the manufacturer the goods will ultimately reach to the customers. So there are three types of channel of distribution one is your direct channel that means from the producer it will directly go to the consumer. Then in second channel like from producer it will go to the distributor. Distributor we can also consider as wholesaler or sometimes different agents are also there and then from that it will go to the consumer. Then in third type of channel of distribution from the producer it will go to the wholesalers then it will go to the retailers or distributors and then ultimately it will reach to the consumers. So in the first channel we can see like direct channel or direct marketing we can call where the producer directly sells their goods to the customers. Then in the second channel there is only one middleman which is we can say a distributor or retailer. Then in the third channel we can see like wholesaler plays a major role in the distribution channel. Now let us discuss the concept of wholesaling in details. So wholesaling refers to all those activities which involves selling of the goods and services to those who buy for reselling or for the other business purposes. So wholesaling excludes the retailers as they are concerned with selling to ultimate consumers in small quantities and manufacturers as they are involved in production most importantly. So the wholesalers deal with business customers rather than final customers. So they pay at least attention to promotion, location or the atmosphere. The transaction involves in wholesaler larger than the retail and also the trade area is large. Also the legal regulations and taxes are different for wholesalers than for retailers. So wholesalers and retailers differ from each other in a various ways. Wholesaling is an important aspect of distribution. It has a significant impact on economy and also it plays a tremendous role in the distribution channel and creates a strong relation with suppliers and customers. Operating cost for wholesalers includes inventory charges, sales for salaries, then ran charges, advertising cost etc. So from the cost perspective the impact of wholesalers on prices is very high. The profit of wholesaler depends on inventory turnover, money value of the product and functions performed by them etc. There are various types of wholesalers. So now let us discuss those. First one is your merchant wholesalers. Their businesses are independently owned and title taken to the merchandise they handle. Full service and limited service wholesalers are there. So what is full service wholesaler? They carry stock, maintain our sales force, then offer credits, make deliveries and provide management assistance. These wholesalers sell to the retailer and industrial distributors to sell the manufacturers and goods and provide credit to the delivery services. Then comes the limited service wholesalers. So these wholesalers sell a limited line of fast-moving consumer goods to small retailers. Then spatial wholesalers, agricultural assemblers, petroleum bug plants and terminals and auction companies fall under this specialized wholesalers category. Now let us discuss the functions of wholesalers. In the process of marketing of goods the wholesalers perform a number of functions which will be first one is your assembling and buying. The wholesalers assembles and or collects small lot of products to the and then they will distribute it to the retailers. Then warehousing wholesalers hold inventories and there is always a gap between the time period of production and consumption. So they require huge inventory or warehousing is required for the wholesalers to sell their products. Then transporting wholesalers can provide a quicker delivery to the retailers. This transportation is done either through their own fleet or through the higher transportation system. Then financing by granting credit to the retailers and franchises the wholesalers provides the goods to the retailers. So they provide financial help to the retailers like you can take the goods now and you can pay the wholesalers after your goods are sold. Then risk bearers. So risk are unavoidable in business which need to be borne and shifted. The risk of loss of change of price then damage quality deterioration or maybe fire or other circumstances all these risks are beared by wholesalers on behalf of the retailers. Then grading packaging and packing. So grading is an important task of wholesalers wherein the stocks are sorted in terms of different sizes, qualities, shapes and so on. So to meet a small lot of requirements of the retailers bulk breaking is done and they repacks the goods for the retailers. Then dispersing and selling wholesalers sales forces help the manufacturers to reach the small business customers at a relatively low cost. The assembled goods and the stocks are dispersed and it is sold to the retailers and the small businesses. Then providing market information. Information regarding competitors activities, new products, price developments etc are provided by the wholesalers to the suppliers and the customers. Now we will discuss the latest trends in wholesaling. So manufacturers often have some issues related with marketing. So wholesalers sometimes what we see nowadays like these companies they are directly selling their products through online or like direct marketing or social media marketing it is booming. So it is a threat for the wholesalers. So major complaints against the wholesalers are manufacturers product lines are not aggressively promoted by the wholesalers or customers orders are not filled fast enough as the wholesalers do not carry enough stock. So up to that market customers are competitive information are not provided by wholesalers. So even direct buying program were designed by large manufacturers and retailers for which the wholesalers had a significant decline in order to meet the changing needs of the customers and suppliers the successful wholesalers had to add up their services and add value to it. The constant changes in the latest trends compelled the wholesalers to reduce the operating cost and invest in advanced materials like materials handling technologies information system and internet. So the latest trend of increase in price and like absorbing the competent suppliers based on cost and quality the position of wholesaler industry is at the risk. So the manufacturers still remain strong by controlling the intermediaries and owning them too. So some of the major trends in this wholesaling industries are like the distribution between large retailers and large wholesalers continues like while many retailers now operate formats such as wholesale clubs or super centers or supermarkets. So they perform the like functions like wholesalers which is again a treat for the wholesalers then both the recently sluggish economy and the demand for increased services have put the squeeze of wholesaler market and wholesalers profit. So however the increased use of computerized automated and web based system will help the wholesalers to contain the cost of ordering shipping and inventory holding thus boosting their productivity. So dear learners now we will just sum up whatever we have discussed in this unit. So in this video lecture we have discussed about wholesaling like wholesaling refers to all those activities which involve selling the goods or services to those who buy for reselling or for the business purpose. The wholesalers deal with business customers rather than final customers. So they pay at least attention to promotion location and atmosphere in the marketing process of goods wholesalers play a crucial role by performing various functions like wholesalers gather small lot of scattered products and like they make it as a bulk purchase. So they also select manufacturers, they places order and make special purchases for seasonal products. Wholesalers maintain inventories to breach the gap between the production and the consumption period. Then they tries to reduce the risk and inventory cost for retailers and producers. Wholesalers provide quick delivery to the retailers utilizing their own transportation system and then their own warehousing and resale system. So wholesalers undertake financing task by granting credit to the retailers and supporting suppliers through early orders and timely payments. So wholesalers bear various business risks such as price change, damage, quality deterioration, theft and non-payment by retailers then contributing to the risk management in the supply chain. So wholesalers engage in grading to sort the stocks based on size, quality and shape. They perform bulk breaking for retailers and repacking for the customers as per the retailers order. Wholesalers utilize sales force to help the manufacturers reach small business customers and in a cost effective way. They disperse and sale assembled and stocked goods to the suppliers and customers. Then the wholesalers supply valuable market information to the retailers and customers including details on competitors' activities, new products and price development etc. So thank you learners, we will see you again in another unit, thank you.