Wholesalers

Wholesalers - INDIRECT CHANNEL Manufacturer Consumer...

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Wholesalers
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Channels of Distribution Series of firms linking the manufacturer to final user Supply Chain Idea: make products available in the right quantities and locations Channels decisions are not automatic and have long run effects
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Amazon.Com Logistics cost containment Improve margins & increase π per additional unit sold Increase ROA & net income
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Amazon.Com (cont) Logistics benefit enhancement Enable competitive pricing given lower cost structure Improve on-time order fulfillment Allow Amazon to offer more items for sale
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DIRECT CHANNEL Manufacturer Consumer
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Direct Channel Direct (manufacturer=>user) distribution is used: 1. Final user is business (not a consumer) 2. Aggressive selling effort is required
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Direct Channel (continued) 3. Said product is more a service than a physical good 4. If working with middlemen is difficult 5. Manufacturer can do marketing functions more efficiently by itself
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Unformatted text preview: INDIRECT CHANNEL Manufacturer Consumer Wholesaler Retailer Indirect Channel Rationale Indirect(manufacturer=>reseller=>user) distribution is used: 1. User has established buying patterns 2. Long distances between manufacturer and users Indirect Channel (continued) 3. Direct distribution is unfeasible because of: a) steep monetary requirements b) substantial risk to bear What Are Wholesalers? Firms that usually buy, take title to, store, and resell goods to retailers or industrial users Wholesalers create value for manufacturers & retailers Wholesaler Functions For manufacturers : 1. provide selling function 2. store inventory 3. supply capital 4. reduce credit risk 5. provide market information Wholesale Functions (continued) For retailers : 1. anticipate needs 2. regroup products 3. store inventory 4. deliver products 5. grant credit 6. provide advisory services 7. provide buying function...
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Wholesalers - INDIRECT CHANNEL Manufacturer Consumer...

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