DEMO

WHOLESALE TRADE.

  • These are various activities that involve buying goods in large quantities from different manufacturers and sell them to retailers in small quantities.
  • The wholesaler is the middlemen between the producers and retailers as shown under:

Producer Wholesaler Retailer Consumer

  • The wholesaler can also be found between the manufacturer and  the consumer:

Manufacturer Wholesaler Consumer.

FIG 1.jpg (318 KB)

Functions of wholesalers

Wholesalers perform important functions to retailers, manufacturers and customers.

Functions of wholesalers to producers

  • Brands , bottles ,blends ,grades ,packages and bleaches products
  • It gathers orders from various retailers
  • It keeps finished products
  • It removes products from producer’s  factories to create space for more production
  • It shoulders the risks
  •  It promotes products for producers
  • It acts as a market for producers
  • It pays cash to producers
  • It gathers information from the market on consumer needs and wants.

Functions of wholesalers to retailers

  • It helps retailers with display methods and laying out of the store
  • It bottles ,blends ,grades , packages  and delivers products to retailers
  • It gives trade credit to retailers
  • It smoothens out the availability of products especially seasonal goods
  • It avails storage facilities to retailers
  • It conveys complaints from retailers to manufacturers
  • It introduces new goods to retailers
  • It breaks the bulk for retailers
  • It provides retailers with a wide range of products sourced from many and different producers.

Functions of wholesalers to producers

  • Taking end –users’ complaints to producers
  • Introducing new products to end –users
  • Making consumers aware of new products through advertising
  • Providing a wide variety of products
  • Preventing  too much up and down swings of prices
  • Ensuring an uninterrupted supply of goods.

Types of wholesalers

There are many and different types of wholesalers, they include the following:       

Cash and carry wholesalers

  • These are wholesalers that sell their products on cash and carry basis.
Features
  • Sell products with high rate of turn-over
  • They provide trolleys and shopping baskets
  • They sell a wide range of products
  • They have parcel counters where customers leave their bags
  • Their goods are lowly priced
  • They have security measures for examples cameras
  • They employ self –service method
  • They sell to both retailers and customers  in bulk
  • They have check –out points
  • They display their wares attractively.

Specialist wholesalers

  • These are wholesalers that concentrate on a single type of a product for example the sale of electrical products only.
Features
  • They are very good in selling one type of the product
  • They give knowledgeable advice on the use and care for the product

General wholesalers.

  •  These wholesalers supply much different merchandise.
Features
  • Their prices do not fluctuate much
  • They have many sales personnel
  • They provide delivery services
  • They give trade credit to retailers
  • They finance producers by paying cash
  • They provide storage facilities
  • They supply a variety of products
  • They advise and inform retailers on products
  • They carry risks through warehousing products
FIG 3.jpg (306 KB)

Co-operative wholesale societies.

  • These are formed by producers for example farmers or co-operative retail societies.
Features
  • They provide a wide range of products
  • They usually sell products with very short shelf –life for example fruits or vegetables
  • They purchase from  producers directly
  • They can produce their own products
  • They purchase from farmers at very low prices
  • They sell their products in large quantities and at very low prices
  • They may sell to co-operative members
  • Each co-operative members contribute some money
  • The extras made are shared among co-operative members

Trends in wholesale trade.

  • These are developments taking place in wholesale trade.
FIG 4.jpg (297 KB)

Elimination of wholesalers

  • This refers to the removal of the wholesaler from   or by-passing of wholesalers in the chain of distribution.
  • There are many forces leading to the removal of wholesalers from the chain of distribution
  • Despite the forces to eliminate wholesalers from the chain of distribution, wholesalers still exist today.

Reasons for the removal of wholesalers.

  • The introduction of tied shops for example Total Filling Stations
  • Some products are fragile and need special handling for example glasses
  • There are products that require fast distribution for examples perishables like vegetables
  • The opening up of own retail shops by producers for example Bata Shoe Company
  • Some products have slow rate of sale for example expensive vehicles and these require direct selling
  • The appointment of official distributors who sell directly to retailers
  • The development of large scale retailers  with  huge financial resources ,own storage facilities and transport  to buy in bulk direct from producers
  • Buying from manufacturers is cost –effective.

Reasons for the continued existence of wholesalers.

Despite all these forces to eliminate wholesalers, they are still around for the following reasons:

  • Some retailers do not have adequate financial resources to buy directly from producers
  • Some retailers do not own any transport.
  • Some retailers do not have adequate storage facilities
  • Some products still require re-branding, packaging, blending and grading before they are sold.

Role of intermediaries or agents.

The intermediaries that we have include:

  1. Brokers
  2. Factors
  3. Del credere agents
  4. Forwarding agents.

Marketing boards

  • Marketing Boards are statutory institutions or public corporations or state enterprises or parastatals established by an Act of parliament to handle the marketing of agricultural or industrial products. Examples of marketing boards include:
  • The Grain Marketing Board[GMB]
  • The Minerals Marketing Corporation[MMC]
  • The Cold Storage Company of Zimbabwe[CSCZ]
  • The Tobacco Marketing Board[TMB]
  • The Cotton Company of Zimbabwe[CCZ]
  • The Dairy Board Company of Zimbabwe Limited [DBCZ].

Reasons for the formation of Marketing Boards.

  • Preventing shortages
  • Stabilizing prices
  • Providing storage facilities
  • Advising farmers on seed and equipment
  • Provision of markets for produce
  • Maintaining the quality of products
  • Collecting products from producers
  • Products processing
  • Preventing fluctuations in supply of products
  • Encouraging exportation and importation of such products
  • Carrying out research and development of agricultural products.

Grain Marketing Board Silos

  • The Grain Marketing Board is the only buyer of all grains in Zimbabwe for example maize, wheat, sorghum, soya beans, rapoko and many more.
FIG 5.jpg (229 KB)

Functions of GMB

  • Buying grain from farmers
  • Storing grain
  • Selling grain to importers, millers and consumers
  • Preventing shortage of grain
  • Monitoring prices of grain
  • Delivering grain to consumers
  • Providing inputs to farmers
  • Preserving and processing  grain
  • Grading grain.

Cold Storage Company

  • It deals with monitoring the quality of meat in all abattoirs to ensure hygienic standards.

Functions of CSC.

  • Supplying meat to registered butcheries. Exporting beef
  • Buying and slaughtering cattle. Operating own cattle ranches
  • Helping producers willing to keep cattle.
FIG 6.jpg (185 KB)

Minerals Marketing Corporation Zimbabwe

  • It is the only buyer of all minerals except gold and silver.

Functions of MMCZ

  • Permitting the sale of minerals between sellers and buyers
  • Provision of advice and expertise
  • Selling metals, asbestos, ores and gem stones to export markets.
FIG 7.jpg (114 KB)

Cotton Company of Zimbabwe

  • It deals with helping and advising cotton farmers.

Functions of CCZ.

  • Giving seeds to cotton growers
  • Running  ginneries. Selling lint locally and abroad
  • Supplying cotton seeds to oil manufacturers.

Tobacco Marketing Board

  • It focuses on tobacco, tobacco products and tobacco processing.

Functions of CCZ.

  • Financing tobacco growers.
  • Warehousing tobacco
  • Monitoring tobacco prices
  • Preventing shortages of tobacco
  • Selling tobacco products locally and abroad
  • Collecting and buying tobacco from tobacco growers
  • Inspecting and grading tobacco.

Dairy Board Zimbabwe Limited

  • It deals with milk, milk products and milk processing.

Functions of DBZL.

  • Providing finance for research on milk and milk production
  • Buying milk from registered milk producers
  • Processing milk into milk products
  • Selling milk to local and abroad markets
  • Transporting milk from large milk producers