Classification of wholesaling

Types of Wholesalers

Wholesalers fall into three major groups. Merchant wholesalers, brokers and agents, and manufacturers’ sales branches and offices. Merchant Wholesalers are the largest single group of wholesalers, accounting for roughly 50 percent of all wholesaling. Merchant wholesalers include two broad types: full-service wholesalers and limited-service wholesalers. Full-service wholesalers provide a full set of services; whereas the various limited-service wholesalers offer fewer services to their suppliers and customers. The several different types of limited-service wholesalers perform varied specialized functions in the distribution channel.

Brokers and agents differ from merchant wholesalers in two ways: They do not take title to goods, and they perform only a few functions. Like merchant wholesalers, they generally specialize by product line or customer type. A broker brings buyers or sellers on a more permanent basis. Manufacturers’ agents (also called manufacturers’ representatives) are the most common type of agent wholesaler. Together, brokers and agents account for 11 percent of the total wholesale volume.

The third major type of wholesaling is that done in manufacturers’ sales branches and offices by sellers or buyers themselves rather than through independent wholesalers.