Republic of the Philippines

Commission on Higher Education

San Jose Community College
San Jose, Malilipot Albay

Wholesaling

Wholesaling is the process of buying, carrying and merchandising its Subsequent

resale to organizational customers, retailers and/or other wholesaler but not the sale of
significant quantity to final consumers.
 Types of Wholesaling

A. Manufacturer Wholesaling -The manufacturer or producer's control wholesaling

which performs all the functions such as owning the products who does not receive
payment until a retailer buys, and deals with a smaller group of customers to maintain
customer patronage.

B. Merchant Wholesaling -Wholesaler controls wholesaling such as buying in a bulk of

units and performs many functions such as warehousing and inventory control. It then
buys products from the manufacturer and resells to the retailer.

C. Agents and Brokers - The manufacturer owns the products and lets the broker sell
the property and pays the agents’ commission; payment is made after the products
are sold. The broker will get much higher commission compare to the agent because
the latter do not have any license compare to the broker which is a passer of a
professional examination intended to them.

RETAILING

Retailing refers to a business activity involved on the sales of goods and services to
the final and ultimate user of products for personal, family or household use. It is the final
stage in a channel of distribution wherein the products are in the custody of the customer
and eventually to the consumer.

Retailing is important because of its impact on the economy, its function in the
distribution channel, and its relationship with suppliers. Retailing's impact on the economy is
a major source of employment with high annual sales.

Function of Retailing in Distribution

1. It participates in the sorting process by collecting an assortment of goods and
services. It divides each segment of the goods and services produced by the
organization.
2. It provides accurate information to consumers through advertising, displays and signs
or sales personnel to avoid problems in the product use and function.
3. Marketing research regarding product features and details to provide support given to
other channel members.
4. 4. It stores merchandise, mark prices, place items on the floor and pay suppliers for
items before selling them to the final consumers for proper monitoring and evaluation.

A. Types of Retailing
1. Independent retailer - operates only one outlet because of limited resources such
as manpower, machine, materials, method, money and the market. It offers personal
service, a convenient location and close customer contact through its personalized or
customized service.
2. Retail chain - involves common ownership of multiple outlets through its dealership,
with centralized 'systematic purchasing process and efficient decision-making,
dispersed target or specific markets and well-known company name as well as the
organization.
3. Retail franchising - contractual arrangement between a franchisor and a retail
franchisee, which allows a franchisee to conduct a certain form of business or
 establishments under an established name and according to a specific set of rules and
regulations.
4. Leased department - department in a retail store that is rented to an outside party.
The organization can attract other enterprise to maximize the place by providing
enough incentives to the lessee especially if the building is new and unoccupied.
5. Consumer cooperative-a retail firm owned and managed by consumer members
who invest and share profits. The members can decide what products to be sold and
what incentives to be given to the consumer which are the members of the
organization such as cooperatives.

B. Store Strategy Mix

1. Convenience store - a food store that is located along passersby with a long hour
and products are needed mostly by the consumer but on limited items.
2. Conventional supermarket - a food store with a wide range of product item and
related products with affordable prices, self-service and one-stop grocery Shopping for
customers.
3. Superstore-sells food and non-food items like office supplies, apparel, beverages,
bakeshop products and small household appliances plus a supermarket in one
location.
4. Combination store- combines food, grocery and general merchandise sales and
enables the retailer to operate efficiently and effectively, increases the number of
consumers, sells high turnover but low profit food items and low turnover but high
profit general merchandise to attract other segments in the organization.
5. Specialty store -provides on one service line or line of goods to attract same line of
customers. It can easily distinguish the specific market in one product line.
6. Variety store - sells a wide and variety of assorted inexpensive and popularly priced
merchandise that tailored for consumer needs and wants.
7. Department store - sells a general line of apparel, linens, furniture, home furnishing
and appliances etc. a. traditional department stores -organization with high name
recognition, fashion effective leader and often dominate the stores around the vicinity.
b. full-line discount stores - department with affordable prices, broad merchandise
assortment and variations, self-service with shopping carts, sells houseware needs for
households, hardware needed by the consumers, electronics, health and beauty aids,
with linens, toys and sporting goods for customers choices.
8. Retail catalogue showroom - customers shop at a warehouse-type store,
consumers write up their own orders during the exhibit or after browsing the catalogue
or brochures because products are usually stocked in back room. There are limited
displays and no actual or physical representation to the customers.

C. Non-store Operations
1. Vending machines - coin or card operated machine which dispenses goods or
services. It eliminates the needs for hired sales personnel, allows 24-hour sales
operation and can be placed outside of the store even without monitoring.
2. Direct selling - includes personal contact with consumers in their homes and
telephone solicitations to attain satisfaction by providing convenience and safety to
the customers.
3. Direct marketing- exposes the consumer to a good or service via a non-personal
medium and orders by phone or telemarketing or through internet using email.

STORE LOCATION
It is looking for a better place selling a certain product. There are factors to be
considered to look for a better location. They are as follows:

1. Accessibility to the market

2. Free from danger
3. Convenience to the suppliers
Basic Forms of Store Locations
A. Isolated Store - a retail outlet which is located on a street where there is no
adjacent store that draws customer traffic and captures the interest as well as impact
to the passersby.

B. Unplanned Business District - refers to two or more stores which are located and
close to one another that sometimes produced healthy competition by attracting more
customers.

Kind of Unplanned Business District

B.1 Central Business District (CBD) - is the center of retailing in the city nearby
other towns and contains the largest commercial and shopping facilities that
attracted different market segments in one locality.

B.2 Secondary Business District (SBD) - is found at the intersection of two

major streets in the city with a medium sized department store, a variety store,
some specialty stores and several similar smaller shops in town.

B.3 Neighborhood Business District (NBD) - satisfies the convenience shopping

and service needs of a neighborhood in the locality by having many small stores or
sari- sari stores with a major retailer being a supermarket, drugstore or a variety
store and is located on the major streets in the area for immediate needs of the
customers.

B.4 String – is composed of a group of stores or shops with similar or compatible

product lines even items situated along the highway or main road.

C. Planned Shopping Center - is centrally owned or managed facilities operated as

an entity for the customers with large parking area to accommodate more customers
and with balanced tenancy. It means that the number and composition of stores within
the center are related to the overall needs of the surrounding population to supply the
unmet needs in the location.

Three Types of Planned Shopping Center

C.1 Regional - sells mostly shopping goods to a dispersed and various customers.
Normally, it takes about half an hour to reach a regional center.
C.2 Community - has a branch department store, variety store, large specialty
store and several other smaller stores to be included under this center. It sells
convenience goods and shopping goods or service for community safety and
security.
C.3 Neighborhood - sells mostly convenience goods and services with a large
Supermarket and drugstore and several smaller stores that will cater to the overall
needs of the people in one vicinity.

SCRAMBLED MERCHANDISING
It takes place when a retailer put together goods and services that are unrelated
to each other or the original business of the retailer that captures the different market
segments.

Reasons:
1. Retailers seek to convert their stores to one-stop shopping centers that
encourage customer patronage and loyalty.
 2. Use of scramble can lead to competition among unrelated retailers so to attract
other market segment.

DISTRIBUTION STRATEGY
It refers to the process of moving goods and services from the company to the
customer. The distribution channel that will be adapted must provide a strategic
advantage to the company. Common distribution channels are the following:
1. Direct sale is when the company/ firm's plan is to move goods directly to the
ultimate users. This is the most effective channel.
2. Original equipment manufacturer sales involve selling a manufactured
product and which is later sold as a finished product to the end user. An example is
the sound system incorporated into cars.
3. Manufacturer’s representative is wholesalers employed by one or several
producers and paid on commission according to quantity sold.
4. Wholesalers are channel members that sell to retailers or other agents for
further distribution through the channel until they reach the final users.
5. Brokers are distributors who buy directly from distributor or wholesaler and
sell to retailers or end users.
6. Retailers are the ones who directly sell to customers in the store. They buy
products without any intermediaries or middlemen.
7. Direct mail includes printed materials used in a targeted campaign to
consumers. These are sent directly to consumers. These include catalogs, letters, e-
mail and other direct appeals.