1. Benefit of selection: A retailer has to keep a wide variety of goods to meet the requirements of his customers. He can collect these goods from one or more wholesalers without going to the manufacturers.
2. Benefit of storage: A retailer cannot buy goods in bulk to maintain a steady supply of goods to market because of financial and storage difficulties. The wholesaler takes upon himself the function of storing the goods and releasing them in small lots to retailers who can replace and replenish their stocks easily.
3. Benefit of specialization: The wholesalers generally specialises in a few variety of goods. They buy them from the manufacturers who can sell them the best quality of goods at the cheapest price. The retailers buy their requirements from the wholesalers, and therefore, they are benefited by their specialization.
4. Benefit of lower risk: The wholesalers assume most of the risk connected with marketing such as fluctuations in prices, spoilage of goods etc. The retailers risk is, therefore, confined to smallest stock kept in his shop.
5. Benefit of credit: The wholesalers supply goods to retailers generally on credit. Thus, the retailers can work with less working capital.