Page 452 - Foundations of Marketing

Retailing, Direct Marketing, and Wholesaling | Chapter 14 419

Table 14.3 Services That Limited-Service Wholesalers Provide

Cash-and-Carry Truck Drop Shipper Mail Order
Physical possession of merchandise Yes Yes No Yes

Personal sales calls on customers No Yes No No

Information about market conditions No Some Yes Yes
Advice to customers No Some Yes No

Stocking and maintenance of merchandise in No No No No
customers’ stores

Credit to customers No No Yes Some

Delivery of merchandise to customers No Yes No No
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This is a convenient and effective method of selling items to customers in remote areas that
other wholesalers might fi nd unprofi table to serve. The Internet has provided an opportunity
for mail-order wholesalers to serve a larger number of buyers, selling products over their web-
sites and having the products shipped by the manufacturers.

Agents and Brokers

Agents and brokers negotiate purchases and expedite sales but do not take title to prod-
ucts. Sometimes called functional middlemen, they perform a limited number of services in
exchange for a commission, which generally is based on the product’s selling price. Agents
represent either buyers or sellers on a permanent basis, whereas brokers are intermediaries
that buyers or sellers employ temporarily.
Although agents and brokers perform even fewer functions than limited-service wholesal-
ers, they are usually specialists in particular products or types of customers and can provide
valuable sales expertise. They know their markets well and often form long-lasting associa-
tions with customers. Agents and brokers enable manufacturers to expand sales when resources
are limited, benefi t from the services of a trained sales force, and hold down personal selling
costs. Table 14.4 summarizes the services provided by agents and brokers.
Manufacturers’ agents , which account for more than half of all agent wholesalers, are
independent intermediaries that represent two or more sellers and usually offer complete prod-
uct lines to customers. They sell and take orders year-round, much as a manufacturer’s sales
force does. Restricted to a particular territory, a manufacturer’s agent handles noncompeting
agents Intermediaries that
and complementary products. The relationship between the agent and the manufacturer is
represent either buyers or
governed by written contracts that outline territories, selling price, order handling, and terms
sellers on a permanent basis
of sale relating to delivery, service, and warranties. Manufacturers’ agents have little or no
brokers Intermediaries that
control over producers’ pricing and marketing policies. They do not extend credit and may
bring buyers and sellers
be unable to provide technical advice. Manufacturers’ agents are commonly used in sales of
together temporarily
apparel, machinery and equipment, steel, furniture, automotive products, electrical goods, and
manufacturers’ agents
some food items.
Independent intermediaries that
Selling agents market either all of a specifi ed product line or a manufacturer’s entire
represent two or more sellers
output. They perform every wholesaling activity except taking title to products. Selling and usually offer customers
agents usually assume the sales function for several producers simultaneously and some complete product lines
fi rms may use them in place of a marketing department. In fact, selling agents are used most selling agents Intermediaries
often by small producers or by manufacturers that have diffi culty maintaining a marketing that market a whole product
department because of such factors as seasonal production. In contrast to manufacturers’ line or a manufacturer’s entire
agents, selling agents generally have no territorial limits and have complete authority over output

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