Primary concern of wholesalers is to maintain their position in the market. The first and foremost issue faced by the wholesalers is the disintermediation of marketing channels. Disintermediation here refers to the removal of wholesalers form the marketing channel, leading to direct transaction between the manufacturers and the buyers. This disintermediation is quite a concern for wholesalers, especially those who do not operate as a dominant entity within a distribution channel. Wholesalers have to try to create greater value for their services so that the retailers do not choose to transact directly with the manufacturers by bypassing the wholesaler.
Yet another concern of wholesalers is the location of facilities. If a very large facility is needed, it becomes very difficult to decide where to locate the business. In some areas, land costs are too high to utilize the space for wholesale business. Wholesalers have to consider a number of factors while selecting a facility location such as access to transportation like roads, railways, airports and seaports. Without expensive and time consuming improvements, areas with available lands sometimes lack the infrastructure which is needed to run wholesaling operations.
Another concern of wholesalers is the high transportation costs, which represent a sizeable portion of overall distribution costs. Wholesalers pass on these higher costs to the customers as high product prices. Wholesalers have to work hard to control transportation costs by employing various methods like using fuel efficient equipment and delivery methods, determining cheaper delivery routes through the use of computer routing software and offering multifarious incentives to customers to accept deliveries in less congested hours of the day.
Yet another serious concern for wholesalers is that they have to adapt themselves to new technologies. These technologies carry advantages as well as disadvantages for the wholesalers. Although these technologies offer multiple benefits, but their usage and learning techniques prove to be quite expensive for the wholesalers. Yet another concern for wholesalers is that they cannot simply confine themselves to offering product to the buyers. In addition to doing so, they also have to offer several value added services in order to fulfill the customers’ expectations. Examples of such value added services are employee training, promotional support and help in managing their operations. In order to carry out timely fulfillment of customers’ demands and requirements, wholesalers have to keep in constant contact with them. Therefore wholesalers have to make considerable effort to meet all these challenges and hence maintain their position in the market.
Yet another concern of wholesalers is the location of facilities. If a very large facility is needed, it becomes very difficult to decide where to locate the business. In some areas, land costs are too high to utilize the space for wholesale business. Wholesalers have to consider a number of factors while selecting a facility location such as access to transportation like roads, railways, airports and seaports. Without expensive and time consuming improvements, areas with available lands sometimes lack the infrastructure which is needed to run wholesaling operations.
Another concern of wholesalers is the high transportation costs, which represent a sizeable portion of overall distribution costs. Wholesalers pass on these higher costs to the customers as high product prices. Wholesalers have to work hard to control transportation costs by employing various methods like using fuel efficient equipment and delivery methods, determining cheaper delivery routes through the use of computer routing software and offering multifarious incentives to customers to accept deliveries in less congested hours of the day.
Yet another serious concern for wholesalers is that they have to adapt themselves to new technologies. These technologies carry advantages as well as disadvantages for the wholesalers. Although these technologies offer multiple benefits, but their usage and learning techniques prove to be quite expensive for the wholesalers. Yet another concern for wholesalers is that they cannot simply confine themselves to offering product to the buyers. In addition to doing so, they also have to offer several value added services in order to fulfill the customers’ expectations. Examples of such value added services are employee training, promotional support and help in managing their operations. In order to carry out timely fulfillment of customers’ demands and requirements, wholesalers have to keep in constant contact with them. Therefore wholesalers have to make considerable effort to meet all these challenges and hence maintain their position in the market.
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