Unit 14 The middlemen of trade

The middlemen of trade are involved in the channels of distribution. They are called middlemen because they lie between extractive and manufacturing industry and the public. They are involved in trade because they deal in the buying and selling of goods.

Types of middlemen

Wholesalers buy from manufacturers and sell to retailers hoping to make a profit, e.g. by buying at one price and selling at a higher price. Retailers buy from manufacturers and sell to customers hoping to make a profit. Larger retailers usually buy goods in bulk straight from manufacturers. Small retailers buy in smaller quantities from wholesalers.

Brokers, unlike wholesalers and retailers, don’t buy goods for themselves. Instead they act as agents by arranging deals for others, e.g. a manufacturer of chocolate might ask a broker to buy cocoa for him on a commodity exchange. Brokers never possess the goods in which they deal. They are used because they are specialists in the goods in which they deal; brokers earn commission.

In home trade the wholesaler is an example of a merchant and is sometimes called a wholesale merchant. In foreign trade there are export and import merchants who buy and sell goods just like a wholesaler. Merchants hope to make a profit.

Vocabulary

middleman – посредник

channels of distribution – каналы сбыта

to deal in smth. – торговать чем-либо

broker – маклер, комиссионер

to act as smb. – работать в качестве

commodity exchange – товарная биржа

merchant – купец, торговец; лицо, занимающееся оптовыми продажами

I. Answer the following questions.

1. How are middlemen involved in trade? 2. What are the types of middlemen and what is the difference between them? 3. How do wholesalers and retailers make a profit? 4. What is the source of profit for brokers?

II. Translate the following sentences into English.

1. Торговые посредники занимаются покупкой и продажей товара, являясь промежуточным звеном между производителя­ми и потребителями. 2. Оптовики покупают у производителей товар по одной цене, а продают по другой, более высокой цене. 3. Брокеры в отличие от оптовиков и розничных торговцев не являются владельцами товара, которым они торгуют. 4. Брокеры действуют как посредники, устраивая сделки для своих клиентов, за что получают комиссионные. 5. Оптовые торговцы, занимающиеся импортом и экспортом, надеются получить прибыль, но могут и понести убытки. 6. Крупные розничные торговцы покупают товар оптом у производителей. 7. Мелкие розничные торговцы покупают у оптовиков, а затем разбивают товар на более мелкие партии.

Unit 15 Wholesaling and retailing

Wholesalers are the institutions which stand between the manufacturer and the retailer. Wholesaling provides channels of distribution which help to bring goods to the market. Wholesalers act as middlemen between manufacturer and retailers. They buy goods in bulk from the manufacturer at a low price and sell them in small quantities to retailers. Wholesaling simplifies the process of distribution. As wholesaler handles a large assortment of goods from many manufactures, he reduces the problem of both manufacturers and retailers.

Wholesalers are used for information and advice. Suggestions which customers make to the retailer are passed to the wholesaler who conveys them to the manufacturer. Thus, the producer can improve his product.

The wholesaler keeps stock. Shoppers like to obtain goods immediately. This requires stock. Neither the producer, nor the retailer has extensive storage facilities and responsibility falls on the wholesaler. More over, the wholesaler arranges imports from abroad. Foreign manufacturers can rarely ship parcels to individual retailers abroad. They prefer to deal with a wholesaler, an import merchant with established trade connections.

Retailing is selling goods and services to the ultimate consumer. There are several types of retail institutions: specialty stores, supermarkets, general merchandise and non-store retailing.

Specialty stores sell one type of product, such as clothing, jewelry, furniture, books. These stores compete against giant department stores. They can adjust more quickly to market conditions.

Big supermarkets are usually well located. All the goods are arranged on trays and shelves. All the prices are clearly marked. The goods are ready-weighed and beautifully packed. There you can find everything you need.

General merchandise stores (GMS) carry a wide variety of products. There are three types of GMS: department stores, discount stores, hypermarkets.

Big department stores started in America more than 50 years ago and then the idea was brought to European countries. Department stores sell a wide range of goods. They are usually found in city centers and often charge high prices. These stores are wonderful places. People can do all their shopping under one roof. All the things for sale are displayed so that they can be easily seen and the customers walk around and choose what they want.

Discount stores specialize in a narrow range of items. Low price is the major attraction of the discount stores. These stores are found outside city centers but near main roads so that customers can easily get to them. A lot of money is spent on advertising and detailed price lists are often shown in newspaper advertisements. Discount stores sell the most popular items, colors and sizes. The stores keep long hours and usually open on Sundays.

Hypermarket is a type of discount store that was developed in Germany. They are very large stores with low-price and high-turnover products. Hypermarkets are found on the edges of towns but near main roads in order to attract customers from a wide area. They are self-service, selling a very wide range of goods including groceries, clothing, gardening equipment and televisions. Hypermarkets achieve cost savings by simplifying their unpacking and display.

There are some major types of non-store retailing: vending machines, door-to-door sales and catalogue sales.