Chapter Summary

This chapter explores two important members of the distribution channel and value delivery system: wholesalers and retailers. Both add value to the product by ensuring assorted merchandise is available when and where customers want it and at an acceptable price. Retailers buy products from manufacturing firms or wholesalers and provide them for sale to the consumer.

Retailers buy in bulk, hold inventory, offer convenient hours for shoppers, supply services, and collect and share feedback from consumers with other members of the distribution channel. Retailers may have a storefront; non-store retailers usually sell through direct mail and catalogs, vending machines, direct selling, online sites, TV home shopping, and telemarketing. Retail strategy includes identifying target audiences, choosing location(s), providing a product assortment, and pricing.

Wholesalers buy goods in bulk at a discount from a manufacturer or other distribution channel member and sell them to retailers for a higher price. They are often called “middlemen” because they link the manufacturer to the retailer. Unlike retailers, wholesalers do not interact with the final consumer, and they do not have highly visible physical locations accessible to end consumers. Wholesalers engage in a variety of business practices including buying, storing, selling, transporting, financing, and even marketing.

Just as in all marketing strategies, retailers and wholesalers contend with changes in consumer behavior and expectations, technological advances, complex regulations, channel member availability, and international dynamics. Of the regulations, most are intended to protect consumers from unethical or dangerous products and business practices.