Wholesale

Wholesale (obsolete: Engros-Handel/-Geschäft/-Lager/-Versand ) denotes commercial in which market participants goods they are not even working or processing in the rule ( merchandise), by manufacturers or other wholesalers and related to resellers, processors, professional users ( eg public authorities, educational institutions ) or to other institutions (eg canteens, clubs), but not sell to private households. In official statistics a business or an operation is classified as being wholesale if from the wholesale activity greater added value as a result of a second or more other activities.

Wholesale is seen as a link between the various stages of distribution. The Buyers of wholesale are businesses of retail, crafts, the hospitality industry, regional wholesalers, industrial or other commercial establishments. Decisions on the selection of wholesale according to type and number count as part of the industrial marketing mix to the distribution policy. However, wholesale companies also have a wide range of instruments of an independent trade marketing ( wholesale marketing). In particular, because of the risk of the elimination, that is, no longer sufficient suppliers and / or customers to find a professional wholesale marketing is absolutely important. Initiated by wholesalers contractual vertical and / or horizontal cooperation act off threats effectively countered, eg contract trade, exclusive sales; Purchasing cooperative as a procurement center, retail establishments and organized by a major act as system headquarters involvement of retailers in a composite group ( volunteer chain, shopping community non- cooperative legal form).

Functions of the wholesale

The wholesale assumes as a link between producers and retailers, mass merchandisers and other traders a variety of functions.

Wholesalers and retailers take every consumer product manufacturers from the costly task of his goods to sell directly to individual end users. For example, a manufacturer produces 10,000 pants. He sells them in smaller lots to various wholesalers, which in turn sell the pants in still smaller parts to many retailers and this eventually sell individual items to individual consumers. The caused by the involvement of wholesalers advantages are obvious: market entry, risk sharing, reduction of distribution costs and financing relief. Similar to retail the wholesale trade meets, among others, these functions:

Bridging time ( warehousing and logistics )

In most cases the production of goods and their use in time agree not match. The time bridging takes over the wholesale, by overlaying the goods ( therefore also called storage function). But not only the permanent stockpiling, but also the logistics services of the wholesale trade make it possible that the differentiated needs of customers can be satisfied at any time.

Examples: potatoes are harvested in summer and autumn. During this period, the wholesaler buys a lot and stores them. This intercalated stock he sold then throughout the year, because consumers want to shop and eat potatoes in winter and spring. - Without organized by Presse-Grosso distribution of newspapers and magazines (some with worldwide sourcing radius) with the fastest possible " dispersion " to thousands of retail outlets, the current supply of the reader would be unthinkable.

Amount of redistribution

This function is performed either as a paragraph or as wholesale buying wholesale, depending on which side of the market is the focus of marketing activities.

Paragraph Wholesale

Industrial companies produce their goods usually in large quantities to saturate their capacity ( cost reduction potential). The wholesaler buys from one or a few manufacturers a large quantity and groups them customizable to smaller amounts to. The customers of the wholesaler can usually refer the goods in any number. It follows that purchase in large quantities, sales in small quantities.

Purchase Wholesale

The wholesaler buys from many companies to small quantities and sold, the total amount on to one or a few companies.

• For agricultural products:

The dairy bought by many farmers small amounts of milk to produce from the large quantity of milk products.

• Example Recycling:

The scrap dealer buys from many artisans metals to sell the large quantity of scrap to a further processing.

Production -related trade

The production -related trade (PVH ) buys goods from producers and sells them on to producers in the subsequent production stage, if necessary, at its processing and / or temporally accurate fitting into downstream operations ( Just- in-time principle).

• Example:

Repurchase and sale of plywood, rubber, steel.

Assortment

The wholesaler is from the often narrow production programs from different manufacturers its own range according to the needs of its clients. The customer therefore found in retail before a more or less wide range of merchandise that differ according to type, quality and execution. Without trading company, a customer would have to obtain their desired products under immense effort itself among manufacturers, may at scattered around the world manufacturers.

Finishing

Certain products require after their generation still a certain period of maturity until they are fully salable. Or they have to be treated or processed or refined before their resale. The processing function includes all fringe benefits of the dealer, which make the product ready for sale and not completely change the product. ( In contrast to the ancillary service is produced or produces the product of substantial performance.)

Examples:

• Coffee roasting ( the grinding of the coffee the original product changed so much that this is no longer are compensating )
• Sort out rotten fruit
• Mature fruits
• Mature wine
• Can be coated workpieces
• Burn schnapps

Service function

The wholesale information and advice on the properties, application, operation and maintenance of the products. As a measure of the sales marketing customer service often makes the sale of a product possible. According to the wholesale can be used as measure of procurement marketing its suppliers provide special service suppliers, such as market information, goods transport or facilitated receipt of goods. A distinction is made between commercial and technical service. Under commercial service fall, for example, extended warranty, payment simplifications, delivery services or online services. From a technical service drop installation and construction, repairs and maintenance.

Market development

The wholesale used by manufacturers as a distribution channel, as a sales channel to distribute their products or as a procurement channel for the procurement of goods for production ( eg materials, equipment, semi-finished products ). The latter features primarily production-related trade. As the wholesaler knows the desires and ideas of its customers, it can help them to organize the correct paragraph or procurement market. He supports manufacturers by making them informed about demand or demand and supply shifts. This information can be included in the product development. This function is with the increasing customer demand for customized products and according to just-in -time delivery and more important.

Sales financing ( lending )

Sales financing is the sale of merchandise on account. By granting a credit period (for example, payable within 30 days ) must allow the dealer to the customer a loan over the period between the delivery of the goods on the invoice and the payment date. Thus, the customers of the wholesaler can use the purchased products, without having to provide for immediate funding. In addition, many wholesalers provide their clients with long-term financing deals, often banks are switched on. Example: wholesalers as lessor

Forms of operation of the wholesale trade

For wholesale we distinguish the following types of operation:

• Pick up wholesale, goods will be picked up by the customer at wholesalers.
• Cash-and- carry wholesale trade ( self-service wholesale ), the customer chooses the desired goods yourself ( self-service), paid the purchase price in cash (cash) and takes it even with (carry ); the most common abbreviation for this sales format is C & C.
• Assortment wholesale, offers several types of goods; The range is wide and can be deep or shallow. Actually, the term " range wholesale " a pleonasm, since each wholesaler puts together assortments. However, it is common in some industries, transport, such as in bookstores, to emphasize the larger assortment of the " liner" in comparison to specialized wholesalers or publisher bound wholesalers.
• Special wholesale, offers only one type of goods; the range is narrow and usually deep.
• Delivery business, selling goods are delivered to customers with their own vehicles or by freight carrier.

Location of the wholesale company

Under the location is defined as the square of the commercial presence of a operation. The decision for a particular location depends on many local factors. In the individual case must be examined to what extent the location factors determine the cost of factors of production and the income for the company benefits.

The optimum operating location is situated where a given equipment with equipment, a maximum profit.

Location factors

• Paragraph, the site is placed in the proximity of the buyer to be able to deliver quickly and cost-effectively.
• Workforce, the location depends on wage levels and existing workers ( quantitative and qualitative).
• Procurement, the site is based on the proximity to the suppliers ( especially for buying wholesale ).
• Land prices, the location depends on land prices (or the amount of rent for premises )
• Competition, the choice of location can be based on the presence of local competitors in order to make it more attractive to the entire local site by increasing the sector-equivalent range (so-called agglomeration effect).
• Culture, the choice of location can be based on the "soft factor" in the local cultural offer to acquire easily qualified personnel (and hold) can.
• Taxes and public charges (political location factors ), with otherwise the same location factors are places with lower taxes and duties for site selection crucial.
• Subsidies (political location factor ), the choice of location are also based on direct and indirect subsidies or benefits which are granted for a permanent settlement.
• Traffic, the site is placed in optimal traffic- developed areas ( well-developed road and rail network or ).

Economic Importance

Quantitatively, the importance of the ( internal ) Wholesale work is already in visible that the German wholesale companies have implemented about 686 billion euros for the year 2005 according to the Federal Statistical Office ( 2007). The Federal Association of Wholesale, Foreign Trade and Services (BGA ) is called € 850 billion turnover even for the year 2008. In addition, the wholesale offers approximately 1.2 million people jobs.

Qualitatively, the importance of wholesale for the overall economy ( Schenk ) lies in the fact that he carried

• Generation of competitive
• Organizing ( sales and procurement ) markets,
• Acquisition and ( sales and procurement ) risks

Contributes to a reduction of transaction costs throughout the value chain.

The resulting age of the Internet, additional off danger by new " intermediaries " of the virtual goods business ( e-commerce) can convert wholesale company in new involvement opportunities when they use a) the Internet for their own procurement and sales processes, and b ) at profilierender focus for their suppliers and customer a benefit increase via custom web presence communicate. "Not the Internet ' exacerbated the elimination of hazards for wholesale, but the renunciation of its active use " ( Schenk, p 403 )

Origin of name

The term wholesale originated in 1800 from the older form Grossierer (French: ' marchant grossier ').

Since the 17th century are in the merchant language the terms wholesale and used in contrast en détail, compare to retail. The term is originally not meant gros " big " as opposed to small but the quantity Measure Gros ( twelve dozen ).