The market does not stand still, it is in constant development taking into account the needs of the population. Wholesale trade is the activity of selling goods with services to those who purchase them for resale or further use (tailoring, processing). It is an important link ensuring the acceleration of the entire process of commodity circulation in the market. Products move through distribution channels, production and consumption are synchronized.
State role
One of the main economic tasks of any country is the restructuring of the wholesale trade, which contributes to the development of small business. Experts note that recently large volumes of trade have been reduced. Therefore, another important task that is worth it is to stop the decline in these operations. Warehousing needs to be restored. It is necessary to build new premises with modern equipment, to restore and reconstruct those places of storage of goods that are already operating. Public policy solves another important problem on which wholesale trade depends. This is the development and improvement of the competitive environment, the departure from monopolism, the promotion of domestic goods.
Wholesale Functions
In market conditions, this type of trade plays a different role. Regarding those who supply goods, the following functions are distinguished:
- Marketing service.
- Concentration and development of commercial activities.
- Investment support for the circulation of goods.
- Reduction of commercial risk.
- Transfer of ownership of products.
Concerning entrepreneurs of small retail organizations, other tasks are identified that are solved by wholesale. These are the functions:
- Delivery of products.
- Storage and stockpiling.
- Demand assessment.
- Conversion of the existing assortment (production) into a commercial one.
- Consulting services, information services.
- Lending to enterprises engaged in retail sales.
Some features
Wholesale trade is a large network of organizations with different ownership forms. Its improvement not only creates the conditions for reforms, but also contributes to the stability of the consumption market. Trade efficiency depends on the wholesalers. Even with a lot of capital, manufacturers often spend money on developing production, rather than organizing sales. Retailers offering customers a wide range of products usually purchase lots from a specific wholesaler, rather than parts from different enterprises. It is believed that the most important is the wholesale trade in goods related to supplying stores with a wide and complex assortment. It is profitable for enterprises that manufacture products to sell in large quantities without any additional sorting according to specific requests. Not every large company has premises and people to transform the range from industrial to commercial. The way out in this situation is wholesale sales services.
Special attention is given to wholesale trade in food. This is a difficult business, since it is associated with risks, is based on the knowledge of managers about the volatile market conditions. You must be able to make decisions quickly. People who are engaged in such activities should know the math, be good organizers. A plus will be such a quality as the ability to bargain. It should be noted that food trade is a labor-intensive activity, it requires an irregular working day, often it is necessary to work on weekends and holidays. If managers are lazy, they may face bankruptcy. In the event of liquidation of enterprises, there is a risk of large losses, since products that are not sold quickly deteriorate. They are sold at bargain prices or thrown away.
Wholesale trade is of great importance in the system associated with the marketing of products. It creates channels through which goods are sent to intermediate and end users.