Page 451 - Foundations of Marketing

418 Part 5 | Distribution Decisions

Merchant Wholesaler
Grainger is a full-service,
limited-line wholesaler of
electrical equipment and
supplies.

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items with high profi t margins, such as health and beauty aids, books, magazines, hosiery,
and greeting cards.

Limited-Service Wholesalers Limited-service wholesalers provide fewer marketing ser-
vices than do full-service wholesalers and specialize in just a few functions. Producers perform
the remaining functions or pass them on to customers or other intermediaries. Limited-service
wholesalers take title to merchandise, but often do not deliver the merchandise, grant credit,
provide marketing information, store inventory, or plan ahead for customers’ future needs.
Because they offer restricted services, limited-service wholesalers charge lower rates and have
smaller profit margins than do full-service wholesalers. The decision about whether to use a
limited-service or a full-service wholesaler depends on the structure of the marketing channel
and the need to manage the supply chain to create a competitive advantage. Although limited-
limited-service wholesalers service wholesalers are less common than other types, they are important in the distribution of
Merchant wholesalers that products like specialty foods, perishable items, construction materials, and coal.
provide some services and Table 14.3 summarizes the services provided by four typical limited-service wholesal-
specialize in a few functions ers: cash-and-carry wholesalers, truck wholesalers, drop shippers, and mail-order whole-
cash-and-carry wholesalers salers. Cash-and-carry wholesalers are intermediaries whose customers—usually small
Limited-service wholesalers businesses—pay cash and furnish transportation. Cash-and-carry wholesalers usually handle
whose customers pay cash and a limited line of products with a high turnover rate, such as groceries, building materials,
furnish transportation
and electrical or offi ce supplies. Many small retailers that other types of wholesalers will
truck wholesalers Limited- not take on because of their small size survive because of cash-and-carry wholesalers. Truck
service wholesalers that wholesalers , sometimes called truck jobbers, transport a limited line of products directly
transport products directly to to customers for on-the-spot inspection and selection. They are often small operators who
customers for inspection and
selection drive their own trucks. They usually have regular routes, calling on retailers and other insti-
tutions to determine their needs. Drop shippers , also known as desk jobbers, take title to
drop shippers Limited-service
wholesalers that take title to products and negotiate sales but never take actual possession of the products. They forward
goods and negotiate sales but orders from retailers, business buyers, or other wholesalers to manufacturers and arrange for
never actually take possession carload shipments of items to be delivered directly from producers to these customers. They
of products assume responsibility for products during the entire transaction, including the costs of any
mail-order wholesalers unsold goods. Mail-order wholesalers use catalogs instead of a sales force to sell products to
Limited-service wholesalers retail and business buyers. Wholesale mail-order houses generally feature cosmetics, specialty
that sell products through foods, sporting goods, offi ce supplies, and automotive parts. Mail-order wholesaling enables
catalogs buyers to choose and order particular catalog items for delivery through various mail carriers.

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