16-1
Chapter 16
Wholesaling and
Physical
Distribution
16-2
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Goals
• Nature and economic justification of wholesaling
• Role of wholesaling in the distribution process
• Differences across three categories of wholesaling
middlemen
• Major types of merchant wholesalers, agent middlemen,
and manufacturer’s sales facilities
• Nature and purpose of physical distribution
• Systems approach to physical distribution
• How physical distribution can strengthen a marketing
program and reduce costs
• Five subsystems within physical distribution
16-3
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Wholesaling
WHOLESALING
All activities related to the sale
of goods and services
to businesses and
other organizations
For
resale,
use in producing other products,
operating an organization
16-4
Economy of Transactions in
Wholesaling
16-5
Size of the Wholesale Market
16-6
Profile of the Wholesaling
Middleman
16-7
Share of Wholesale Trade
16-8
Full-Service Wholesalers’ Services
16-9
Agent Wholesaling Middlemen
Manufacturers’
Agents
Auction
Company
16-10
Brokers
Selling
Agents
Which Type of Middlemen to Use?
16-11
Physical Distribution
PHYSICAL DISTRIBUTION
LOGISTICS
All activities involved
in moving the right product
to the right place
at the right time
16-12
Physical Distribution
Reduce
costs
Gain
Differential
advantage
Supply
Chain
Management
16-13
Fulfillment
In
E-commerce
Coordinated
logistics
Strategic Use of Physical
Distribution
Improve
Customer
Service
Create
Time and Place
Utilities
Influence
Channel
Decisions
16-14
Reduce
Distribution
Costs
Stabilize
Prices
Control
Shipping
Costs
Physical Distribution
Order
Processing
Electronic
Data
Interchange
16-15
Inventory
Control
Customer
Service
Economic Order Quantity
16-16
Inventory Location and
Warehousing
Types
of
Warehouses
Public
Private
Materials
Handling
16-17
Comparison of Transportation
Methods
16-18
Comparison of Transportation
Methods
16-19
Transportation
16-20
Major
Modes
Intermodal
Transportation
Freight
Forwarders
Packagedelivery
Key Terms and Concepts
•
•
•
•
Wholesaling
Wholesaling middlemen
Merchant wholesaler
Agent wholesaling
middleman
• Manufacturer’s sales
facility
• Manufacturer’s sales
branch
• Manufacturer’s sales
office
16-21
McGraw-Hill/Irwin
•
•
•
•
•
•
•
•
•
•
Full-service wholesaler
Truck jobber
Drop shipper
Manufacturers’ agent
Broker
Selling agent
Auction company
Import-export agents
Physical distribution
Fulfillment
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms and Concepts
• Online category manager
• Supply chain
management
• Total cost concept
• Contract logistics
• Physical distribution
management
• Electronic data
interchange (EDI)
• Economic order quantity
(EOQ)
16-22
McGraw-Hill/Irwin
• Just-in-Time
• Market response system
• Collaborative, planning,
forecasting, and
replenishment (CPER)
• Enterprise resource
planning (ERP) systems
• Private warehouse
• Public warehouse
• Distribution center
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms and Concepts
• Containerization
• Intermodal
transportation
• One-stop shipping
• Freight forwarder
• Package-delivery firms
16-23
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.