A wholesaler may be defined as a trader who buys goods in large quantities from the manufacturer or producer and sells them in small quantities to the retailer. The wholesaler like the retailer is an essential element in the channel of distribution of production.
Wholesalers are also called middlemen, they are between the manufacturers and the retailers.
Functions of Wholesaler:
(i) He purchases Goods in Large Quantities: By buying goods in large quantities, the wholesaler helps the producer to pursue relatively the principle of mass production.
(ii) Warehousing: Provision of warehouses for storing goods, buying and clearing the goods from manufacturers’ warehouses, and storing them in their own warehouses. It makes the product available at an affordable price and makes spaces available for further production.
(iii) He makes Funds available for the Producer: Financing production, he does this by buying goods in large quantities and making payments promptly.
(iv) He bears the Risk of a Fall in Price: By buying and storing goods in large quantities, the wholesaler bears the risk of any fall in price.
(v) He completes the production of some goods by marketing the products.
(vi) He is involved in Advertising: Sometimes the wholesaler performs this function for the manufacturer through trade fairs and exhibitions.
(vii) He provides Information to the Manufacturer: The wholesaler informs the manufacturer about market situations from the information he gathers from the retailer and consumers.
(viii) They perform branding, grading, and packaging of some essential goods for the producer.