Types of Wholesaler and Organizational Structure of Wholesaler Warehouse

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By: Site Engineer, Staff

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Types of Wholesalers

Wholesalers can be divided into two broad categories:

1. Full Function Wholesalers

The function wholesalers perform all the marketing functions. They carry a variety of products. However, there are some that carry only specialized items.

The main ones are:

  • General Merchandize Wholesalers: These carry a very wide range of product items including food, clothing, hardware, cosmetics, housing appliances, and other electrical and electronic goods. This type of wholesalers usually serves the departmental stores.
  • Limited Line Wholesalers: These carry few product lines but they offer greater depths of assortments of the product lines they carry. They specialize in stocking a few lines and are often known by those items they stock.
  • Specialty-Line Wholesalers: They usually carry one product line and very limited varieties on that line. Their aim is directed towards providing their customers with specialized services.

2. Limited Function Wholesalers

They are merchant wholesalers in that they take title to the goods they handle. They, however, do not perform all the wholesaling functions on these goods. They also tend to concentrate on the handling of few product lines.

The main ones include:

  • Cash and Carry Wholesalers: They are limited function wholesalers that sell to only customers that will pay cash and provide transport for those goods they buy from them. They are able to sell at low prices because they do not have to attract customers through erecting beautiful stores, providing credit, or transport facilities. They usually carry items that move very fast and quality is not their emphasis. The main attraction is the low cost of the items they carry. Most of them also operate their own retail outlets. Their main difference is that they sell to other retailers at low prices. These types of stores started to emerge in developing countries in the early 1980s especially in the big cities in those countries.
  • Truck Wholesalers: These are usually small companies that have some trucks. There are some retailers who are their regular customers and they provide transportation services for them. They carry a variety of their goods directly to these retailers for inspection and selection before purchase. They usually operate in supplying grocery stores and other perishable items like vegetables, fruits, eggs, milk, and meat items. Usually, they demand cash purchase for their wares.
  • Mail-Order Wholesalers: They develop price lists and catalogs which they send to retailers. Their major markets come from retailers in towns and villages far away from the ports. They also service institutions and industrial companies. They usually deal with items like textile, clothing, cosmetics, and hardware that can be shipped through post officers or sent by rail.

Warehouses

This is the most important asset of a wholesaler. In fact, the wholesaler organization is structured along its warehouse operations. The warehouses are usually facilities designed to store and move goods. Warehouses are usually located at the ports or transportation nodes or junctions.

The major warehouses in most of the developing countries are usually located around big cities. These cities are either sea, air or river ports, or railway junctions and terminals.

Types of Warehouses

There are two major types of warehouses. There are also three other forms or specialized warehouses that offer special services.

The major types of warehouses are the following:

1. Public Warehouses

These are business organizations that provide storage and related physical distribution facilities on a rental basis to other businesses. They can be owned by an individual or corporation. They are usually located by the sea or river ports, railway stations, and airports.

Public warehouses provide other services apart from storage such as reshipment of goods, financing, display of products, and filling orders. They may even provide security for their agents’ products. They may also establish warehouses for some clients in their inventory locations. These are referred to as field warehouses. They can provide bonded storage. This is the provision of temporary storage for goods that have not been cleared by the customs authorities for entry into the economy until the owner are ready to clear them.

2. Private Warehouses

These are owned and managed by individuals, private or public corporations as part of their own businesses. They are usually regarded as part of physical distribution costs. They may also be established as complete profit centers depending on the number of goods that the company wishes to handle by itself.

3. Other Forms of Warehouses or Specialized Warehouses

There are three forms of this type of warehouses:

  • Government Petroleum Depots and Grain Warehouses: These are huge elevators built by the federal government to store petroleum to aid distribution throughout the country. Grain elevators are also built to provide buffer stocks of grains during the period of shortages in the economy. The grains are bought when there are surpluses in the market and sold during the period of scarcity to reduce the hardship on the populace. These grain elevators are cited in major cities in West Africa where plenty of grains are grown.
  • Cold-Storage Warehouse: These are built by companies that handle large items requiring specialized refrigerated storage. Easily spoilt products like meat, milk, medicine, are handled in these warehouses.
  • Distribution Warehouses: These are special kinds of warehouses designed for breaking bulk operations. They are not meant for storing goods but to speed up the movement of goods from the producer to the retailer. The aim is to treat the distribution as a total concept in order to reduce costs and increase turnover.

Organizational Structure of Wholesalers Warehouse

A wholesaler’s organizational structure is usually patterned in conformity with the efficient management of its warehousing.

The main divisions of a warehouse organizational structure are as follows:

1. Warehouse Operations

This division is responsible for the maintenance of the store. This section is responsible for purchases and for storing all the wholesaler’s items. It is responsible for the inventory control of the company’s stock. The division is also in charge of transportation and responsible for the delivery of items to retailers.

2. Secretary Administrative Division

This division deals with all correspondences of the organization. It is responsible for the management of all staff and overseeing the staff welfare and the finances of the organization. It is to maintain the security and the cleanliness of the organization. The section may also run the restaurant for the workers if there is one in the organizational setup.

3. Publicity and Promotion Division

The division is responsible for the promotion of the company’s products. it is responsible for developing the catalogs and the price lists for the company’s products. it arranges for demonstration and provides samples and set up all the window displays. It advertises the company’s products on billboards and liaises with the advertising agencies and selects the company’s advertising media like magazines and trade journals to promote all the company’s products.

4. Commodity or Product Division

This division has buyers who are in charge of product groups. The buyers are experts in the product groups that they manage. They maintain producer’s lists. They are assisted by travelers who go round the customers to sell to them and salesmen who man the office sales. Anytime the buyers require more goods to be bought they make a requisition to the warehouse operation managers who are responsible for the purchases and the maintenance of inventories in the stories.

 

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