Services offered by manufacturers to the retailers
The important services offered by manufacturers to the retailers are listed as below:
(i) Availability of goods: Retailers have to maintain adequate stock of varied commodities so that they can offer variety to their customers. The wholesalers make the products of various manufacturers readily available to the retailers.
(ii) Marketing support: The wholesalers perform various marketing functions and provide support to the retailers. They undertake advertisements and other sales promotional activities to induce customers to purchase the goods.
(iii) Grant of credit: The wholesalers generally extend credit facilities to their regular customers. This enables the retailers to manage their business with relatively small amount of working capital.
(iv) Specialized knowledge: The wholesalers specialize in one line of products and know the pulse of the market. They pass on the benefit of their specialized knowledge to the retailers. They inform the retailers about the new products, their uses, quality, prices, etc.
(v) Risk sharing: The wholesalers purchase in bulk and sell in relatively small quantities to the retailers. Being able to manage with purchase of merchandise in smaller quantities, retailers are in a position to avoid the risk of storage, pilferage, obsolescence, reduction in prices and demand fluctuations in respect of the additional goods that they would have to purchase in case the services of wholesalers are not available.