The term middleman is used to describe a wholesale system in a traditional distribution channel. A typical wholesaler buys products from the manufacturer and sells it to the retailing units. For the wholesaler to become a success it is essential to have services that can not be offered by a manufacturer and retailer.
The primary reason for the existence of middleman is for filling the gap between the manufacturing process and the time retailer needs it. A typical wholesaler will be having a huge area to store goods which the manufacturer supplies to them and the retailers buy them whenever required. The storing and supplying of the goods are done whenever required makes it easy for the manufacturers to produce any quantity from the factory.
As wholesalers often distribute the products in the supply chain they are also known as distributors.
It is the duty of wholesalers to coordinate with retailers to make sure that the products are reached at the retail store on time. This should be done so that there is no excess stock in the retailer store. They also track the orders so that manufacturers can ship the products as soon as they are being produced.
Understanding about the latest trends and demand in the industry is a serious concern for the wholesalers. It is the role of wholesalers that run the business because they convey the demand to the retailers and manufacturers. When there is a high demand being forecasted wholesalers give advice to the manufacturers to produce more and makes stocks according to the demand from the retailers.