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Unit 11: Wholesale Purchasing and Negotiation with Vendors

Although there are a number of ways to classify wholesalers, the categories used by the Census Notes
of Wholesale Trade are employed most often. The three types of wholesalers are:

 merchant wholesalers;
 agents, brokers, and commission merchants; and
 manufacturers’ sales branches and offices.

Merchant Wholesalers

Merchant wholesalers are firms engaged primarily in buying, taking title to, storing (usually),
and physically handling products in relatively large quantities and reselling the products in
smaller quantities to retailers, industrial, commercial, or institutional concerns, and to other
wholesalers. They go under many different names, such as wholesaler, jobber, distributor,
industrial distributor, supply house, assembler, importer, exporter, and many others.

Brokers

Agents, brokers, and commission merchants are also independent middlemen who do not (for
the most part) take title to the goods in which they deal, but instead are actively involved in
negotiatory functions of buying and selling while acting on behalf of their clients. They are
usually compensated in the form of commissions on sales or purchases. Some of the more
common types go under the names of manufacturers’ agents, commission merchants, brokers,
selling agents, and import and export agents.

Manufacturers’ Agents

Manufacturers’ sales branches and offices are owned and operated by manufacturers but are
physically separated from manufacturing plants. They are used primarily for the purpose of
distributing the manufacturers’ own products at wholesale. Some have warehousing facilities
where inventories are maintained, while others are merely sales offices. Some of them also
wholesale allied and supplementary products purchased from other manufacturers.



Caselet Negotiation Problem

ne of the biggest stumbling blocks encountered by a negotiator is to clearly
understand the real issues as the root cause and basis for the negotiation in the
Ofirst place. All too many times, negotiators take insufficient time to clearly identify
and frame the problem or issues to be resolved and negotiated. This is the crucial first step
to any negotiation. If this first phase of the negotiation process is not addressed properly,
than it is quite likely that the rest the whole negotiation process will unravel because the
core issues were not properly understood at the outset.

Substantial electronics firm face considerable difficulties in one of their subassemblies.
The root core of the problem revolved around certain types of fittings and pins that were
becoming bent and distorted by the operation of the machinery. Units which were being
produced were damaged and had to be rejected because of imperfections. These rejected
components were put aside and then reworked later on in the month.
Contd...

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