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business risks by purchasing and selling the goods in their own name. They purchase in bulk and

sell in small lots to retailers or industrial users.

They undertake various activities such as grading of products, packing into smaller lots, storage,

transportation, promotion of goods, collection of market information, collection of small and
scattered orders of retailers and distribution of supplies to them. They also relieve the retailers

of maintaining large stock of articles and extend credit facilities to them. Most of the functions

performed by wholesalers are such which cannot be eliminated. If there are no wholesalers,
these functions shall have to be performed either by the manufacturers or the retailers.

Services of Wholesalers

Wholesalers provide various services to manufacturers as well as retailers and provide immense

help in the distribution of goods and services. By making the products available at a place

where these are needed and at a time when these are needed for consumption or use, they
provide both the time and place utility. The various services of wholesalers to different sections

are discussed below:

Services to Manufacturers

Major services offered by wholesalers to the producers of goods and services are given as

below:
(i) Facilitating large scale production:

Wholesalers collect small orders from a number of retailers and pass on the pool of such orders

to the manufacturers and make purchases in bulk quantities. This enables the producers to

undertake production on a large scale and take advantage of the economies of scale.

(ii) Bearing risk:
The wholesale merchants deal in goods in their own name, take delivery of the goods and keep

the goods purchased in large lots in their warehouses. In the process, they bear variety of risks

such as the risk of fall in prices, theft, pilferage, spoilage, fire, etc. To that extent, they relieve
the manufacturers from bearing these risks.

(iii) Financial assistance:

The wholesalers provide financial assistance to the manufacturers in the sense that they

generally make cash payment for the goods purchased by them. To that extent, the