1. Principles of Business, Marketing, and Finance Wholesalers in a Private Enterprise System Copyright © Texas Education Agency, 2011. All rights reserved

2. “Copyright and Terms of Service Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1)Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Copyright © Texas Education Agency, 2011. All rights reserved 2

3. Manage the Middle Producers use wholesalers to reach all of the consumers in its target market Numerous retailers Easier for a retailer to work with a wholesaler than numerous producers Copyright © Texas Education Agency, 2011. All rights reserved 3

4. Benefits of Wholesalers Provide important marketing services for the channels in which they participate Provide one or more of the needed marketing activities better or at a lower cost Combine the orders of several small retailers and purchases in efficient quantities Specialize in storage and inventory management Provide facilities for product storage that manufacturers do not have Copyright © Texas Education Agency, 2011. All rights reserved 4

5. BuyingSellingTransportingStoringFinancing Wholesaling Activities Copyright © Texas Education Agency, 2011. All rights reserved 5

6. Wholesaling Activities Accumulate products of many manufacturers, develop appropriate assortments for customers, and distribute the products to their customers Assist manufacturers in determining needs of retailers and final consumers and provide market information to retailers Collect and analyze information on sales, costs, changes in demand, and inventory levels Purchase products from producers and manufacturers and selling them to their customers Assume risk by investing money in products that may be damaged or destroyed Copyright © Texas Education Agency, 2011. All rights reserved 6

7. Full-Service Wholesalers Take title to the products they sell Provide a full range of distribution activities Provide or arrange transportation services Offer Credit Provide promotion assistance, product research, information, product installation and repair Copyright © Texas Education Agency, 2011. All rights reserved 7

8. Limited-Service Wholesalers May not provide services such as research, credit, or promotional support Concentrate on one or two important functions such as warehousing and storage, product delivery, or accumulating products for sale in a convenient location Copyright © Texas Education Agency, 2011. All rights reserved 8

9. Locating Suppliers Selling Financing Extension of Workforce Arranging Shipment Do Not Take Title to Products Independent businesses Provide specialized exchange functions Agents and Brokers Copyright © Texas Education Agency, 2011. All rights reserved 9

10. Other Wholesaling Businesses of small businesses that affiliate because of the benefit gained from cooperating for marketing and distribution activitiesWholesale franchises and cooperatives - groups of small businesses that affiliate because of the benefit gained from cooperating for marketing and distribution activities IGA FTD ACE Hardware Copyright © Texas Education Agency, 2011. All rights reserved 10

11. Wholesale Member Clubs Sam’s and Costco Open to final consumers and businesses Products displayed in large warehouses Limited product assortments are available in large quantities Customers must transport their purchased products Copyright © Texas Education Agency, 2011. All rights reserved 11

12. Changing Role of Wholesalers Large retailer may prefer working directly with producers (such as a particular designer) There are more small- and medium-sized retailer and manufacturers than there are large businesses Copyright © Texas Education Agency, 2011. All rights reserved 12

13. Access to markets Product awareness Export and import organization -important in building international business Better communications and information -improved technology, broader customer service Work to identify their customers -understand their needs Learn the problems the customers are having -with products and marketing activities and help them to solve those problems Changing Role of Wholesalers Copyright © Texas Education Agency, 2011. All rights reserved 13

14. Specialized Services Marketing Research and Marketing Information Services Provide Customers with Important Data Computer Technology to Process Orders Quickly New Methods for Storing and Handling Products to Reduce Product Damage, Cost of Distribution, and Time Needed for Delivery RFID applications in “smart mirrors” used in fitting rooms in department stores. RFID tags enable interrogation of database to find complementary items or locate other sizes or colors. Copyright © Texas Education Agency, 2011. All rights reserved 14

15. Adding Customer Service Marketing and Promotional Planning 24-Hour Ordering and Emergency Deliveries Specialized Storage Facilities Individualized Branding and Packaging Services Copyright © Texas Education Agency, 2011. All rights reserved 15