Types of Merchant Wholesalers

Wholesaling is an important link in the distribution channel, connecting manufacturers and retailers with customers. Merchant wholesalers, also known as full-service wholesalers, play a crucial role in this process by buying and storing large quantities of goods and then selling them to other businesses. There are several types of merchant wholesalers, each with its own unique characteristics.

1. General Merchants: They offer a wide variety of products and services to a broad range of customers, including retailers, government agencies, and other wholesalers.
   
   
2. Specialty Merchants: They focus on a specific product line, such as sporting goods or electronics, and serve a narrow range of customers, such as retailers who specialize in the same product line.
   
   
3. Limited-Line Merchants: They offer a limited range of products, such as plumbing supplies or paper products, to a broad range of customers.
   
   
4. Cash-and-Carry Merchants: They sell products directly to retailers and other businesses and allow them to pick up the products at the wholesaler's location.
   
   
5. Drop Shippers: They sell products directly to customers, but they do not physically handle the products themselves. Instead, they arrange for the products to be shipped directly from the manufacturer to the customer.
   
   
6. Rack Jobbers: They specialize in the distribution of products to convenience stores, drugstores, and other small retailers.
   
   

In conclusion, each type of merchant wholesaler serves a specific segment of the market and plays a crucial role in the distribution of goods. Understanding the different types of merchant wholesalers is important for businesses looking to build effective distribution channels and reach their target customers.