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induce customers to purchase the goods. The retailers are benefitted as it helps them in

increasing the demand for various new products.

(iii) Grant of credit: The wholesalers generally extend credit facilities to their regular customers.

This enables the retailers to manage their business with relatively small amount of working
capital.

(iv) Specialized knowledge: The wholesalers specialize in one line of products and know the

pulse of the market. They pass on the benefit of their specialized knowledge to the retailers.
They inform the retailers about the new products, their uses, quality, prices, etc. They may also

advise them on the decor of the retail outlet, allocation of shelf space and demonstration of

certain products.

(v) Risk sharing: The wholesalers purchase in bulk and sell in relatively small quantities to the

retailers. Being able to purchase merchandise in smaller quantities, retailers are in a position to
avoid the risk of storage, pilferage, obsolescence, reduction in prices and demand fluctuations

in respect of larger quantities of goods that they would have to purchase in case the services of

wholesalers are not available.