Movie producers seldom show movies themselves to their audience rather it is the multiplex and theaters which shows movies to the audience, if you look at it from marketing point of view than the movie producers are the manufacturers of goods while audience is similar to consumers of goods and multiplex acts like wholesalers as they are the link between movie producers and audience who want to watch the movie. Wholesalers are those people who act as a link between the producers of goods who produces the goods and retailers who sell the goods directly to the consumers, in order to understand more about wholesalers one should look at various features of wholesalers –
Wholesalers Features
Link between Producers and Retailers
The first and foremost feature of wholesaling is that it acts as a link between the producers of the goods and retailer of those goods because producers of goods cannot reach every retailer as they are scattered all over the city or country and that is the reason why producers of goods prefer to appoint wholesalers for every city or important area of city so that they have to deal with only a few wholesalers and not thousands of retailers.
Lack of Contact with End-users
Wholesalers never deal with end users that are the consumers of the goods because wholesalers sell to the retailers and it is the job of a retailer to sell the goods to the consumers who will be consuming the good.
High Capital Requirement
Another feature of wholesaling is that one needs to have sufficient capital as wholesaling requires purchasing goods in bulk quantity from the producers of the goods and in turn providing those goods in small quantity to the retailers of the area in which wholesaler is serving.
Bulk Sales
Wholesaling is a bulk business implying that you are not selling to individual customers whose requirement is one or two units of a product rather you are selling to retailers who buy quantities in bulk and that is the reason why there is no need of marketing as retailers contact the wholesalers whenever there is requirement of product by them.
Fixed Margin of Profit
Wholesaling is a fixed margin business in the sense that wholesaler gets fixed percentage of total sales and there is no scope of extraordinary profit in wholesaling business. Hence for example if monthly total sales done by the wholesaler is $100000 and his or her profit margin is 5% than his income will be $5000 per month. Hence higher sales mean higher profit and lower sales means lower profit because wholesaler can only play with volumes as the margin of profit will always be fixed.
Credit Sales
While wholesaler will have to pay cash to the producers for the goods purchased by him or her but when it comes to a retailer they take goods from the wholesaler on credit. In simple words, the majority of time wholesalers have to give goods on credit to retailers and collect payment from retailers after some time which may range from 7 days to 30 days.
Space Requirement
A retailer can start his or her business even in a small area but when it comes to wholesaling than you need to have a large area so as to store goods because there is a time lag between wholesaler purchasing goods from producers and retailer purchasing goods from the wholesaler.
As one can see from the above characteristics of wholesaling that wholesalers perform an important function when it comes to providing goods from producer’s warehouses to the end users that is at consumer’s home with the help of retailers.