The wholesalers generally buy large quantity of goods and they act as intermediaries between the manufacturers and retailers for the sale of goods. There are some wholesalers who sell directly to consumers but most of the wholesale market business depends on the sale of goods to the retailers. The wholesalers have a significant market power and they tend to have a large size.
Depending on products handled, ownership and methods of distribution, the wholesalers can be classified as merchant wholesalers; manufacturer sales office; and brokers, commission merchants and agents. Merchant wholesalers are basically resellers who buy goods in bulk and then sell them in smaller chunks to retailers, importers or exporters. Brokers, commission merchants and agents are the independent companies that negotiate the bulk sales for the manufacturers or another wholesaler for a commission without actually handling the products. In addition, some product manufacturers have their own offices or braches to handle sales of goods to other businesses, usually to merchant wholesalers. These branch offices are known as manufacturer sales.
The wholesale distribution industry is changing with growing adoption of new technologies, increasing customer demands and changing market dynamics. Distributors are focusing on achieving operational efficiency by working on issues such as demand management, transportation planning, warehouse operations and logistics. With the emergence of advanced analytic tools, the wholesalers and distributors are evaluating their relationship with customers to better understand the cost to serve. Another trend observed in the wholesale industry is the expansion of online channels, where the distributors are setting up always on, mobile ready, self-service sales channels to complement their traditional channels.
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