One reason Cornets Ltd may have decided to sell through a wholesaler is to reach a much larger market and increase its sales volume. The case study states the wholesaler has "hundreds of customers", whereas Cornets Ltd previously only sold to 50 shops directly. By selling in bulk to one wholesaler, Cornets Ltd can simplify its distribution process, reduce its own delivery costs and administration, and focus on production, while the wholesaler takes on the role of distributing to many individual retailers.
A wholesaler is an intermediary in the distribution channel that buys goods in large quantities from producers and sells them in smaller quantities to retailers. For a producer like Cornets Ltd, using a wholesaler has several advantages:
- **Access to a wider market:** Wholesalers have an established network of retail customers. As the case study shows, this allowed Cornets Ltd to expand from 50 customers to "hundreds". This leads to higher potential sales.
- **Reduced costs and complexity:** The producer makes fewer, larger deliveries to the wholesaler's depot rather than many small, expensive deliveries to individual shops. This saves on transport costs, administration, and sales staff.
- **Bulk purchasing:** Wholesalers buy in large quantities, which can provide a steady and predictable stream of revenue for the producer.
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