Page 385 - Introduction to Business

CHAPTER 10 Developing the Promotion and Distribution Mixes 359

Wholesalers. Merchant wholesalers account for almost 80 percent of whole-
saler revenues. Merchant wholesalers purchase merchandise, thus taking legal merchant wholesalers Wholesalers
title to it, and resell it. Some merchant wholesalers provide a full range of that purchase merchandise and resell it
services.
Regular wholesalers provide a full range of services such as carrying inven- regular wholesalers Wholesalers that
tories, providing promotion, and extending credit. They generally carry provide a full range of services
consumer goods and are independently owned firms.
Industrial distributors are wholesalers that operate in the industrial goods industrial distributors Wholesalers that
market. They tend to specialize in a limited line of products and may spe- handle industrial products and may
specialize in a limited line of products
cialize in the kinds of markets they reach.
and markets to which the products are
Rack jobbers are regular wholesalers who specialize in selling nonfood sold
items, such as toys, records, and houseware items, to retailers. They stock rack jobbers Regular whole-salers that
the product for the retailers and mark the prices. Generally, they sell on sell nonfood items to retailers
consignment to retailers, which means that the retailers do not have to consignment An arrangement whereby
retailers do not have to pay for
pay for merchandise until it is sold.
merchandise until they sell it
Others provide limited services.
Drop shippers are limited-service wholesalers that take title to merchandise drop shippers Limited-service
but do not take physical possession. The manufacturer performs the wholesalers that take title to merchandise
but do not take physical possession
transportation and storage function.
Cash-and-carry wholesalers do not extend credit to their purchasers and do cash-and-carry wholesalers Limited-
not provide purchasers with transportation. Purchasers come to the estab- service wholesalers that do not provide
their customers with credit or
lishment of cash-and-carry wholesalers, choose the merchandise they
transportation
want, pay cash for the orders, and arrange for delivery.
Truck wholesalers are limited-function wholesalers who generally sell per- truck wholesalers Limited-service
ishable or semiperishable products. Carrying limited stock, they make fre- wholesalers that sell limited lines of
perishable or semiperishable products
quent calls on their customers. Also called wagon jobbers, they tend to
to retailers
service food retailers, restaurants, and hotels.
Manufacturers’ sales branches and sales offices are often established by firms
separate from their manufacturing operations. These branches and offices
enable the manufacturer to perform the wholesaling function and are often
established when the manufacturer decides not to use wholesalers for all or part
of the firm’s product lines. Sales branches carry inventories of products and cus- sales branches Wholesale operations
tomer orders are filled from these inventories. Sales offices do not carry inven- that carry inventories that are
established by manufacturers
tories. Both sales branches and sales offices serve as offices for salespeople in
sales offices Wholesale operations that
that territory.
do not carry inventories that are
Agents, brokers, and commission merchants do not purchase products for resale. established by manufacturers
They perform various services for which they are paid a commission. Selling agents selling agents Wholesalers that
sell all of a specified line or the entire output for their principals. They usually do represent a client and sell all the client’s
not sell competing lines for firms that are in competition with their principals. They specific line or entire output and are
given control over the terms of sale and
generally perform the entire range of marketing functions and are given control pricing
over the terms of the sale and pricing. Selling agents are used instead of a company’s
own sales force. They are paid a commission.
Manufacturers’ agents, unlike selling agents, do not handle a manufacturer’s manufacturers’ agents Wholesalers that
total output or single product line. They are not given control over the terms of the are not given control over the terms of
sale and pricing because they sell only
sale and pricing. Manufacturers’ agents are widely used in distributing industrial
part of a client’s output or product line
goods. They are paid a commission. Brokers bring buyers and sellers together to
brokers Wholesalers with limited
consummate a transaction. They represent either the buyer or the seller but not authority over the terms of sale; they
both. They usually have limited authority over the terms of the sale, such as extend- bring buyer and seller together and are
important in the sale of food products
ing credit and establishing price. They are paid a commission. Brokers are impor-
tant in the sale of many kinds of food products.

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.