ABSTRACT
Between the retailer and the mass manufacturer is the buffer of the wholesaler. At home in sixteenth-century Venice or twentieth-century Detroit, the merchant performs the sorting functions of the marketing channel. Articles are purchased in bulk, broken into smaller lots and made up into different mixes to meet the demands of individual retailers. In many marketing channels the wholesaler is a critical institution. Through ten wholesalers a food retailer, for example, has access to several hundred producing firms. Conversely a single manufacturer, again through ten wholesalers, is able to get his product to several hundred supermarkets. Inevitably, the wholesaler charges for the services to retailer and manufacturer. Within a capitalist economy, in many instances, the wholesaler can exert a stranglehold on a market channel and wield considerable power over the retailer on one side and the manufacturer on the other. In such a power relationship there is considerable potential for conflict. Retailer and manufacturer are likely, if they view the wholesaler as too powerful, to find ways to bypass wholesalers within the marketing channel. This removal of the need for wholesalers currently is oc,::urring in channels for some goods in North America and Western Europe. Not unnaturally wholesalers respond strongly to this erosion of their power base and seek new ways to create and influence markets.
The Pivotal Position of Wholesaling The strength of wholesalers within a national marketing system reflects the complexity and extent of internal integration in the particular national economy. It has been shown earlier that peasant producer-retailer economies operate through the local distribution of small amounts of goods and consequently have no need for wholesalers. Goods are not produced in sufficient quantities to ever be bulked and distribution is local so the primary wholesale functions of breaking bulk and transport are absent from the marketing system. Belshaw (1965) with reference to Port Moresby and Fiji, states that, with the beginnings of marketing,
