WHOLESALING

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Wholesaling is a part of the marketing system. It provides channels of distribution which help to bring goods to the market. Generally indirect channels are used to market manufactured consumer goods. It could be from the manufacturer to the wholesaler, from the retailer to the consumer or through more complicated channels. A direct channel moves goods from the manufacturer or producer to the consumer.

Wholesaling is often a field of small business, but there is a growing chain movement in the western countries. About a quarter of wholesaling units account for one-third of total sales.

Two-third of the wholesaling middleman are merchant wholesalers who take title to the goods they deal in. There are also agent middlemen who negotiate purchases or sales or both. They don't take title to the goods they deal in. Sometimes they take possession though. These agents don't earn salaries. They receive commissions. This is a percentage of the value of the goods they sell.

Wholesalers simplify the process of distribution. For example, the average supermarket stocks 5.000 items in groceries alone, a retail druggist can have more than 6.000 items. As a wholesaler handles a large assortment of items from numerous manufacturers he reduces the problem of both manufacturer and retailer. The store-keeper does not have to deal directly with thousands of different people. He usually has a well-stocked store and deals with only a few wholesalers.

Active Vocabulary

wholesaling - гуртова торгівля

to provide channels - забезпечувати системою (збуту)

indirect channels - непряма, опосередкована система (збуту)

complicated channels - складна система (збуту)

retailer - роздрібний торговець

chain movement - рух до об’єднання

wholesale unit - відділ, яка займається гуртовою торгівлею

total sales - сукупний продаж

middleman - посередник, комісіонер

merchant wholesaler - гуртовий покупець

wholesaling middleman - гуртовий посередник (покупець)

to take title to the goods -купувати товар як власність

agent middleman - посередник між виробником і покупцем

to negotiate purchases or sales вести переговори з приводу купівлі чи продажу

to earn salary - заробляти зарплату

to receive commissions - отримувати комісійні (відсоток від продажу)

grocery - бакалійна торгівля

to handle - 1) керувати, 2) торгувати (амер.)

assortment - асортимент

Comprehension Questions

1. What is the aim of the wholesaling?

2. How can you describe a direct channel of distribution?

3. What is an indirect channel of distribution?

4. What channel of distribution is preferable?

Is there any difference between a merchant wholesaler and an agent middleman?

What is this difference?

6. How does a wholesaler simplify the process of distribution?

7. What would a retailer have to do without wholesalers?

Vocabulary Practice

Exercise 1. Choose the necessary word and put it in the sentence.

1. They use both direct and indirect... of distribution. 1 wholesalers

2. Agent middlemen do not... to the goods they deal in. 2 take title

3. Usually wholesaling... stands between the producer and the retailer. 3 retailer

4. A supermarket may... thousands of commissions items. 4 stock

5. Usually a wholesaler handles a large...of items of numerous

manufacturers. 5 channels

6. Agent middlemen don't earn salaries, they.... 6 assortment

7. A wholesaler doesn't deal with the customers,... does. 7 to receive

8.... simplify the problems of manufacturers. 8 middleman

Dialogue

John is explaining his new job to his wife, Susan. He is a sales trainee for a company.

John It's a great job, you know. The salesmen are paid salaries instead of being on

commission.

Susan Why do you find it great? You can earn less money.

John Well, it's a regular weekly salary. And besides we get reimbursed for everything

lunches and dinners even the football tickets, the car, gasoline, tolls.

Susan That's really great.

John And I'm going to get a raise in three months.

Susan And what are you going to see

John Foam rubber.

Susan What is it used for?

John It is used to make couches and beds, generally ideal with furniture

manufacturers.

Susan So you will travel much, won't you?

John No. Delivery is a part of our wholesaling operation. Foam is sold and delivered

by the truckloads. It is rather bulky and it is expensive to have it shipped a big

distance. We are going to deal with buyers who are in this region.

Susan That's fine. I don't want you to travel too much. By the way I want to know more

about sales procedure.

John At first I go to see a buyer. We discuss what he needs. After that I send him a

written quote. If our prices suit him, he'll call us and send an order.

Susan Do you take orders over the phone?

John Yes. The buyers are always in a hurry and a letter would take too much time to

come. If it's a verbal agreement we call it gentlemen's agreement.

Susan And what happens after the verbal agreement?

John We receive a written purchase order. It is called p.o.- and it has a number that we

use for all future correspondence on that order. The office then retypes the order

form and the p.o. and order form are stapled