276 Chapter 10 Product, Price, and Place Copyright Goodheart-Willcox Co., Inc. One part of a supply chain consists of businesses that supply the raw materials, component parts, and other supplies to manufacturers for production. Another part of the supply chain is the businesses involved in logistics. Logistics is physically moving products from the manufacturers to distributors, retailers, or end users. The final part of the supply chain is selling the product or service to the end users, either consumers, businesses, or both. Supply chain management is coordinating the events happening throughout the supply chain. Effective supply chain management results in the following benefits: • streamlined inventories • lower operating costs • timely product availability • increased customer satisfaction The people or businesses between the manufacturers or producers and the end users are called intermediaries. There are several types of intermediaries, including wholesalers, retailers, and agents. Figure 10-4 outlines characteristics of intermediaries. Intermediaries Type Characteristics Wholesaler • Breaks down bulk packages into smaller quantities for resale • Buys from manufacturers or producers and resells to retailers • Takes ownership of the products • Provides storage facilities • Often takes on some marketing responsibilities (i.e., provide marketing support in the form of shelf signs, flyers, or advertising) • Extends credit to retailers • Provides sales information and training Retailer • Has personal relationships with end users • Takes on most of the marketing responsibilities • Often extends consumer credit • Sets the final selling price to end users Agent (broker) • Does not take ownership of products • Connects buyers and sellers • Takes a commission, which is a percentage of the sale of the product • Is useful for international trade and for services Internet • Helps niche products reach a large audience • Is convenient for making purchases • Uses e-commerce technology for payments • May eliminate some other intermediaries because producers can use it to reach end users directly and inexpensively Figure 10-4. Each type of intermediary meets a different set of needs. Goodheart-Willcox Publisher