Merchant Middlemen are the
intermediaries who buy and sell the goods in their own name, and in return earn
a profit out of it. They take ownership as well as possession of the goods they
sell. They operate in their own name and bear all the risks. Merchant middleman
can be further sub- divided into:
Merchant Wholesalers: Merchant wholesalers are wholesalers
who take title to the goods. They are also sometimes referred to as
distributors, dealers, and jobbers. This category includes both full- service
wholesalers and limited-service wholesalers. Full-service wholesalers
performabroadrangeofservicesfortheir customers, such as stocking inventories,
operating warehouses, supplying credit to buyers, employing salespeople to
assist customers, and delivering goods to customers.
Limited- Service Wholesalers offer fewer services
to their customers but lower prices. They might not offer delivery services,
extend their customers’ credit, or have sales forces that actively call
sellers. Small retailers often buy from cash-and-carry wholesalers to keep
their prices as low as big retailers that get large discounts because of the
huge volumes of goods they buy.
Drop Shippers are another type of limited-service
wholesaler. Although drop shippers take title to the goods, they don’t actually
take possession of them or handle them. They deal with goods that are large or
bulky. Instead, they earn a commission by finding sellers and passing their
orders over to the producers, who then ship them directly to the sellers.
Mail-order wholesalers sell their products using catalogs instead of sales
forces and then ship the products over to buyers.
jobbers (or truck wholesalers) actually store products,
which are often highly perishable (e.g., fresh fish), on their trucks. The
trucks make the rounds to customers, who inspect and select the products they want straight off
Jobbers sell specialty products, such as books, hosiery, and
magazines that they display on their own racks in stores. Rack jobbers retain
the title to the goods while the merchandise remain physically in the stores
for sale. Periodically, they take count of what’s been sold off their racks and
then bill the stores for those items.