Wholesalers And Retailers

Most retailers go to wholesalers every morning or every second day to buy the goods they need for their customers. Fruit and vegetables are perishable and keeping them a few days requires quite heavy infrastructure. That’s why retailers tend to come very regularly to have the freshest products they can. It is very important for them to provide their customers with a range of products that is sufficiently diverse and where the goods are present in a regular way, even though there are sometimes unpredicted shortages. They can also profit of oversupply by getting very cheap goods from wholesalers and sell them to attract clients. Their first interest is thus to find the wholesalers, from whom they could purchase the products they need at a cheaper price.

The constraint of continuity in products forces them to have habits on the market itself: either they go to certain wholesale sellers who always have a wide range of products or they have relations with several sellers who will help them fulfil their needs as well as they can. In there case, having a friendly relation with a seller can enable them to order from one day to another, or to know about shortages to come a day in advance.

The other constraint for the buyers is time. Most of them have to go back to their shop as early as possible to have their fruits ready for the first customers. Hence, they need some information on the market situation but cannot go around indefinitely. In this market, there is no global information for the current day, but an estimation of the average price is officially displayed for each product. Sellers display no prices and transactions are always preceded by negotiations. To get information, buyers can visit several wholesale sellers, or alternatively ask some of their friends who has visited other sellers. Usually, retailers spend some time in the bar, discussing with others, or use their cell phones to ask prices to their friends.
To achieve their goal of gathering the products, a retailer needs to go and visit wholesale sellers. The retailer has no representation of prices: it can compare the values among wholesale sellers, but doesn’t keep this knowledge from one time to another.

When a retailer decides who it wants to visit, it send a message to the wholesale seller, proposing to buy a product. This message queues among other retailers’ and is answered to buy the wholesale seller.

A retailer is characterised by two behavioural aspects: its degree of loyalty and the time it stays on the market. It can be either loyal or selfish, and the difference of behaviour, which is implied, will be described in the next section. It can stay for a short or a long time. There are 4-negotiation period on the market. A short-time retailer can stay for 3 periods; a long-time retailer can stay for 4 periods.

Retailers (mainly loyal ones) have a regular wholesale seller on the market, which is initialised randomly. For the first model, the regular wholesale seller is always the same along the simulation.

Article Source: http://www.articlebankonline.com

Those that are buying wholesale goods and wholesale traders themselves should check out www.redwholesale.com.

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