Types of Intermediaries

The different types of marketing intermediaries differ significantly in their roles, capabilities, territories, level and size of operations, cost of operations, remunerations and amenability for control by the principal. Let us see the main characteristics of each of them.

Sole-Selling Agent/Marketer: When a manufacturer prefers to stay out of the marketing and distribution task, he appoints a suitable agency as his sole- selling agent/marketer and entrusts the marketing job with him. A ‘sole-selling agent’ or a ‘marketer’ is usually a large marketing intermediary with large resources and extensive territory of operation. He will be having his own network of distributors/stockiest/wholesalers, semi-wholesalers and retailers. He takes care of most of the marketing and distribution functions on behalf of the manufacturer. Obviously; a sole-selling agent/ marketer will earn a large margin/commission compared to other types of intermediaries. A manufacturer can have one or more marketers; but when he opts for a sole selling agent, he appoints just one agency as the sole-selling agent (in a given territory).

Types of Marketing Intermediaries

Sole-selling agent   Marketer C & F agents (CFAs) Redistribution stockiest Stockiest / Distributor / Wholesaler Semi-wholesaler

Retailer / dealer   Broker Franchisees Authorized representatives Commission agents Jobbers

In many cases, manufacturers employ carrying and forwarding agents, often referred to as C&F Agents, or CFAs. The CFAs can be described as special category wholesalers. They supply stocks on behalf of the manufacturer to the-wholesale sector or the retail sector. Their function is distribution. Their distinguishing characteristic is that they do not resell products, but act as the agent/representative of the manufacturer. They act on behalf of the manufacturer and as his extended arm. In essence, they are manufacturer’s branches.

Wholesaler/Stockiest/Distributor: A ‘wholesaler’ or ‘stockiest’ or ‘distributor’ is also a large operator but not on a level comparable with a marketer or sole selling agent, in size, resources, and territory of operation. The wholesaler/stockiest/distributor operates under the marketer- sole selling agent, where such an arrangement is used by the manufacturer.

Nature and Characteristics of Wholesaling: A wholesaler buys the product in large quantities, (often, from several producers) and resells the goods in sizeable lots to other intermediaries down the line, such as semi-wholesalers and retailers. Normally, a wholesaler does not sell directly to consumers, the exception being institutional buyers who prefer to buy their requirements from wholesalers rather than retailers. In fact, the distinguishing feature of wholesalers is that they do not sell to the ultimate consumers for personal consumption. Even when they sell to institutional buyers who are ultimate consumers, the sale is not for personal consumption of an individual/household consumer.

Wholesalers generally specialize; some specialize by type of product, some by industry and some by markets. The rationale for their existence is their cost-effective operation in buying goods in large quantities and reselling them to other intermediaries in smaller, yet sizeable lots.

Wholesalers add value by performing a number of vital marketing functions. Stock holding and sub-distribution are the main functions of the wholesalers. They also perform functions like promotion, financing, and collection of accounts receivables and provision of market feedback. They serve the principals as well as the retailers under them. In some cases, they also assume a part of the risk associated with product failures, price changes and bad debts.

Wholesalers basically belong to two types: Agent wholesalers and merchant wholesalers usually, merchant wholesalers participate in all the flows that characterize the distribution process while agent wholesalers do so only in some of the flows.

Semi Wholesalers: Semi wholesalers are intermediaries who buy products either from producers wholesalers, bulk, break the bulk and resell the goods (mostly) to retailers in assortments needed by the Like the wholesalers, semi-wholesalers too perform the various wholesaling functions that. Part of the distribution process. In some cases, they may also perform the retailing function Their strength is ‘specialization by region ‘. They assist the producer in reaching a large number of retailers efficiently. They spread the distribution cost over the products of several producers, as they usually handle the products of a number of producers.

Retailer Dealer Retailers sell to the household/ultimate consumers. They are at the bottom of the distributor’s hierarchy, working under wholesalers/stockiest/distributors/semi-wholesalers, as the case may be. In cases where the company operates a single-tier distribution system, they operate directly under the company. The retailers are also sometimes referred to as dealers or authorized representatives. They operate in a relatively smaller territory or at a specific location; they not normally perform stock-holding and sub-distribution functions. The stocks they keep operational stocks necessary for immediate sale at the retail outlet.