Wholesalers stock goods during the harvest season and sell them during the peak demand period. In this way, he contributes in the stabilization of prices and violent fluctuations in prices are prevented.

The wholesaler informs the producers about the changes in taste and fashion of consumers and at the same time he provides valuable market information to retailers about the quality and type of products available in the market.

The wholesaler buys goods in bulk and store it. As a result he bears all the trade risk arising out of sudden fall in prices or damage or destruction of goods in the warehouse. Sometimes, when retailers fail to repay for their credited good, the burden of bad debt is also borne by him.

The types of channel distribution are:
(i) Channels based on the middlemen.
(ii) Channels based on the type of goods and services.
(iii) Channels based on national and international markets

A businessman appoints a person to buy and sell goods on his behalf and gives him the right to borrow money on the security of goods. That person is called mercantile agent.

Merchant middleman can be sub - divided into:
(i) Wholesaler
(ii) Retailer

A Broker is one who bargains for another and receives commission for his service. He is paid 'brokerage' for his services.

According to S. Evelyn Thomas "the retailer is the last of the many links in the economic chain whereby the consumer's wants are satisfied smoothly and efficiently by retailers".
(or)
According to Cundiff and Still "a retailer is a merchant or occasionally an agent whose main business is selling directly to the ultimate consumers".
(or)
A retailer has been defined as "a trading intermediary engaged in the distribution of goods to the ultimate consumer".

According to Cundiff and Still "Wholesaler buys from the producer and sell merchandise to the retailers and other merchants and not to the consumers".
(or)
According to Evelyn Thomas ", a true wholesaler is himself neither a manufacturer nor a retailer but act as a link between the two".

The term 'Middlemen' refers to all those who are in the link between the primary producer and the ultimate consumer in the exchange of goods or services.