Wholesalers are the first contact for the company’s for B2C sale. It is the wholesaler who pushes the brand to the retailers and other bulk consumers. He plays a big role in maintaining the price in the market. So, wholesaler promotion or motivation is an important task for the companies.
Why should commodity wholesalers be promoted
If a wholesaler is able to generate good business through a brand, he might also take steps to promote the brand. A dealer of my cement company was so happy with our services that to boost sales in his region, he got advertisement sign-boards installed, distributed Point-of-Purchase material to his retail network and conducted promotional meetings at his cost. A wholesaler will give a brand he trusts on credit to his retail network with confidence that his investment will not sink as the retailers will be able to liquidate the product. Same cannot be said for untrustworthy brands.
Remember, having quality wholesalers in the network reduces the effort of the company towards push sales and company can concentrate on creating a pull from the market. They can make or break a brand in the market. They are so closely associated with companies that often customers cannot distinguish them from the company. That is why wholesaler promotion is an important strategy element.
Wholesaler Promotion requirements
Wholesaler promotion needs to fulfill two needs of wholesaler from the brand point of view: monetary & psychological. Companies need to fulfill both these needs in their wholesaler promotion plan.
Monetarily the commodity brand should be as rewarding or better than the competitor brands. Only exception is when the commodity is having a good brand equity and despite lower returns, the wholesaler is able to quickly rotate his money and does not need to give material on credit in the market. Apart from the mark-up on the billing price of the company, the wholesalers also earn through the discounts and schemes run by companies.
However, if the company gives entire discount along with billing itself, there is a possibility that the wholesalers will pass it on to the retailers due to pressure to clear the stock. This will put a downward pressure on the prices in the market. So the companies pass on some discounts at the end of the year. This is not informed to the wholesalers initially and is an additional profit for him. Also, often schemes benefits are in the non-cash form like gold, white goods, vehicles, etc.
Psychological satisfaction is the second thing wholesalers look for when dealing with commodity brands. It is due to this reason that companies conduct competition for highest sales at district, state or national level as part of their wholesaler promotion plan. To encourage small wholesalers, companies often have various other categories, like highest growth, highest market share, etc.
Big wholesalers always want a treatment different from the smaller ones. A few big wholesalers are so egoistic that they do not like to stay in the same rooms as small wholesalers when the company takes them to tours. Companies need to be careful while handling such wholesalers. At the same time, the small wholesalers should not feel step-brotherly treatment. There should be an endeavour to reduce company’s dependence on the egoistic wholesalers.
A tertiary need of some wholesalers is the relationship building by the companies. Companies organize picnics, festival get-togethers, movie shows, etc. to allow wholesalers interact with company personnel in a non-business set-up. Company personnel personally give birthday and anniversary gifts to Wholesalers. Companies are trying to have formal systems to track this initiative also. Automatic messages are sent to local salesperson, reminding him of the birthday or anniversary of the wholesaler. On festivals or important occasions, greetings are sent by the company directly to the wholesaler or through the sales personnel. All these initiatives are taking wholesaler promotion to a new level.
