“INTERNSHIP REPORT ON (RAHAMATH ROADWAYS)”

Internship Report submitted in partial fulfilment for the requirements of

the Degree of

BACHELOR OF BUSINESS ADMINISTRATION WITH

COMPUTER APPLICATION

Submitted BY
MOHAMMED RIYAS MR
(2025G0366)

Under the guidance of

Dr. G. Murali Monahari

DEAPERTMENT OF BBA CA

November - 2022
 DECLARATION

I MOHAMMED RIYAS MR (2025G0366) hereby declare that the internship on “

RAHAMATH ROADWAYS ”, submitted to Bharathiar University, in partial fulfilment
of the requirements for the award of the degree of BACHELOR OF BUSINESS
ADMININSTRATION WITH COMPUTER APPLICATION, is a record of original record
work done by me during the academic year 2022-2023, under the supervision and
guidance of, (Dr. G. Murali Manohari), Sri Krishna Adithya College of Arts and
Science, Kovaipudur, Coimbatore – 641 042 and it has not formed the basis for the
award of any Degree/ Diploma/ Associateship/ Fellowship or their similar title to any
candidate of any University.

Place:
Date:

Signature of the
Candidate

MOHAMMED RIYAS MR
(2025G0366)
 CERTIFICATE

This is to certify that, the internship report on “RAHAMATH ROADWAYS”,

submitted to Bharathiar University, in partial fulfilment of the requirements for the
award of the Degree of BACHELOR OF BUSINESS ADMININSTRATION WITH
COMPUTER APPLICATION is a record of original record work done by MOHAMMED
RIYAS (2025G0366) during the period 2022-2023 of his/her study in the Department
of BBA CA at Sri Krishna Adithya College of Arts and Science, Kovaipudur,
Coimbatore – 641 042, under my guidance and the record has not formed the basis
for the award of any Degree/ Diploma/ Associateship/ Fellowship or other similar title
to any candidate of any University.

Date:
Place:

Signature of the Guide Head of the Department

Seal
PRINCIPAL

Viva voce held on:

External Examiner Internal Examiner

 ACKNOWLEDGEMENT

An internship report work is the process of experiencing a long way in helping

up a person in his respective profession and a group of kind hearts is behind its
success. So we have taken this golden opportunity to acknowledge those who molded
up this study.

I sincerely thank our beloved Principal Dr.S.PALANIAMMAL, Sri Krishna Adithya

College of Arts and Science, who add more value to this training.

I am extremely grateful to the indebted Head of the Department Dr.V.SURESH, Sri

Krishna Adithya College of Arts and Science, who has helped me in arranging this
training.

Then gratitude goes to my supportive and encouraging internship Dr. G. Murali

Manohari Assistant Professor, Department of BBA CA, Sri Krishna Adithya College
of Arts and Science, for their support throughout the course of my study and his timely
advice and kind co-operation.

Then my hearty gratitude goes to the honourable FACULTY MEMBERS of

Department of BBA CA, Sri Krishna Adithya College of Arts and Science, for their
support extended whenever required.

Last but not the least I take this opportunity to thank the almighty, my Parents
and friends for their encouragement and cooperation.
 TABLE OF CONTENTS

CHAPTER
TITLE PAGE NO.
NO.
1. Introduction
History of the company
About the code of conduct
I
Management Structure
Description of the operation

2. PRODUCTION / SERVICE DEPARTMENT

II
About the Service department

3. HUMAN RESOURCE DEPARTMENT

III About the department
HR Development

4. MARKETING DEPARTMENT
IV
About the department

V 5. PICTURE REVIEW OF COMPANY

VI SUGGESTIONS AND CONCLUSION

Appendix ( If any)
CHAPTER: 1
INTODUCTION
 WHO ARE CONTRACTORS?

A general contractor, main contractor or prime contractor is responsible for the day-to-day
oversight of a construction site, management of vendors and trades, and the communication of
information to all involved parties throughout the course of a building project.

A general contractor is a construction manager employed by a client, usually upon the advice of the
project's architect or engineer. Responsible for the overall coordination of a project, general
contractors may also act as building designer and foreman (a tradesman in charge of a crew).
A general contractor must first assess the project-specific documents (referred to as a bid, proposal,
or tender documents). In the case of renovations, a site visit is required to get a better understanding
of the project. Depending on the project delivery method, the contractor will submit a fixed price
proposal or bid, cost-plus price or an estimate. The general contractor considers the cost of home
office overhead, general conditions, materials, and equipment, as well as the cost of labor, to provide
the owner with a price for the project.
Contract documents may include drawings, project manuals (including general, supplementary, or
special conditions and specifications), and addendum or modifications issued prior to
proposal/bidding and prepared by a design professional, such as an architect. The general contractor
may be the construction manager or construction manager at high

WHAT IS AGENCY?

A government or state agency, sometimes an appointed commission, is a permanent or semi-

permanent organization in the machinery of government that is responsible for the oversight and
administration of specific functions, such as an administration. There is a notable variety of agency
types. Although usage differs, a government agency is normally distinct both from a department
or ministry, and other types of public body established by government. The functions of an agency
are normally executive in character since different types of organizations (such as commissions) are
most often constituted in an advisory role—this distinction is often blurred in practice however, it is
not allowed.
The agency in india:
The term agency in India has several meanings; for example,the Cabinet and the
parliament Secretariat describes itself as a "nodal agency for coordination amongst the ministries of
the Govt. of India". Most notably as an international feature, what appear to be independent agencies
(or apex agencies) include some that have active roles for Ministers: such as, the National Security
Council, the Indian Council of Agricultural Research, and the Planning Commission, which is
chaired ex officio by the Prime Minister.

What is the role of agency?

Consulting
Whether you are launching a new product or entering a new market, research and analysis of the
target audience, its needs, the competition etc. is critical to your success. This is where a marketing
agency steps in to help you prepare for the market by conducting a deep analysis to create new
strategies you can implement.

Branding
Marketing agencies can also help you create the right image for your brand or product, so that it
strikes the right chord in the hearts of your potential buyers and converts them into loyal customers.
There are several advantages of hiring a marketing agency to conceptualise the most suitable
positioning as they that the creative resources to do so.

Direct Marketing
Some marketing companies specialise in helping you plan and manage direct mail campaigns, in
addition to designing as well as writing the content for direct mail marketing. This can be a very
impactful method of reaching out to a set consumer base and measure the responses effectively.

Digital Marketing
Social media channels such as Facebook, Twitter and Instagram have had a dramatic influence on the
current business environment. In this highly dynamic scenario, the role of digital marketing agency
becomes immensely important in building a positive perception for your brand on the digital
platform.

Marketing communications
Every now and then, your organisation may need communications materials such as brochures,
product guides, newsletters, and customer magazines. These collaterals need to be designed keeping
your brand identity and aesthetics in mind, so that your consumers relate effortlessly. Marketing
agencies provide services such as writing, design, and production services, as well as a strategy for
how best to reach your target audience for upcoming events or new product launches.

What the services they do?

Diversity and complexity of modern life has increased the need for specialists in every walk of life.
These days individual has neither the time nor the ability to meet his requirements himself. He takes
the assistance of those who specialise in their respective fields and manage the affairs better. These
specialised persons are known as agents. Right from the household savings and investment in the
business at international level, the role of agents has acquired a great significance these days. In
business sector there are several areas in which agency services can be provided.

The various agency services can be broadly classified into tow heads as follows.
a) Financial Agency Services like Savings and Investment Agency, Insurance Agency

b) Commercial Agency Services like Advertising Agency, Selling and Purchasing agency and
Clearing and Forwarding Agency ,Tour and Travel Agency etc..

The forgoing chapters will explain about the Agency which I have gone through the internship .
1.2 MANGAEMENT STRUCTURE :

`A management structure describes how a company organizes its management hierarchy. In almost
all organizations, a hierarchy exists. This hierarchy determines the lines of authority,
communications, rights and duties of that organization. It also determines how the roles, power and
responsibilities are assigned, controlled, and coordinated, and how information flows between the
different levels of management. Within an organization, the structure differs, depending on Board,
Middle and Lower management.
There are countless ways to structure an agency. The most common agency structures are:
- sole proprietorship
- partnership
- limited liability company (LLC)
- corporation The structure of an agency will usually be dictated by the size of the agency and the
number of employees.
For example, a small agency with only a handful of employees may opt for a sole proprietorship or
partnership, whereas a larger agency with many employees may opt for an LLC or corporation. The
management structure of an agency can also vary depending on the size of the agency and the
number of employees. For example, a small agency with only a handful of employees may have a
very flat management structure, with all employees reporting directly to the owner or CEO.
Alternatively, a large agency with many employees may have a more hierarchical management
structure, with employees divided into teams or departments and each team or department led by a
manager. No matter what the size or management structure of an agency, it is important to have clear
communication channels and a defined chain of command to ensure that everyone is on the same
page and knows who to go to with questions or concerns.
Here the agency company goes under organizational structures which is the method by which work
flows through an organization.

The below diagram shows the flow chart of organizational structure of a agency company:
 Four Basic Elements of Organizational Structure

An organizational structure typically has four essential elements; you can add more building blocks
or components, depending on your business needs.

No matter what, ensure you include the following basic elements:

Chain of Command

Your chain of command is how tasks are delegated and work is approved. An org structure allows
you to define how many "rungs of the ladder" a particular department or business line should have.
In other words, who tells whom to do what? And how are issues, requests, and proposals
communicated up and down that ladder

Departmentation

Departmentation is one of the most important elements of your organizational structure. It clusters
your teams by similar roles and responsibilities and allows you to understand how each department
connects to one another.
Span of Control

Your span of control can represent two things: who falls under a manager's, well, management ... and
which tasks fall under a department's responsibility. Having a defined span of control not only avoids
double-work from your different teams, but helps you identify gaps in your structure.

Centralization

Centralization describes where decisions are ultimately made. Once you've established your chain of
command, you'll need to consider which people and departments have a say in each decision. A
business can lean toward centralized, where final decisions are made by just one or two entities; or
decentralized, where final decisions are made within the team or department in charge of carrying
out that decision

KEY ABOUT ORGANIZATIONAL STRUCTURE:

 An organizational structure outlines how certain activities are directed to achieve the goals
of an organization.

 Successful organizational structures define each employee's job and how it fits within the
overall system.

 A centralized structure has a defined chain of command, while decentralized structures give
almost every employee receiving a high level of personal agency.

 Types of organizational structures include functional, divisional, flatarchy, and matrix

structures.

 Senior leaders should consider a variety of factors before deciding which type of
organization is best for their business, including the business goals, industry, and culture.
 Top management techniques
 Dole out recognition when it’s deserved.
An employee study by gamification and behavior management platform Badgeville found that 70
percent of workers are more motivated by recognition than by monetary rewards. Employees who are
acknowledged for their good work tend to feel more of an emotional commitment to their job, which
results directly in increased effort (i.e., better productivity and improvement to your bottom line).
What’s more, a study by TINYpulse, an employee engagement firm, found that only 21 percent of
employees feel strongly valued at work. So don’t be shy — bring out the warm-and-fuzzies for a job
well done.
 Make company goals transparent and provide consistent feedback.
Sharing the company’s goals and vision with employees helps them understand the meaning of their
day-to-day tasks and the value that they each bring to the job. Set up monthly or quarterly check-ins
to provide honest feedback — even if that includes constructive criticism. When you hold your
employees accountable, they’re more likely to deliver if it’s crystal clear what they’re expected to
achieve.
 Provide training and career development.
Work with your employees to identify areas of growth and learn what parts of the business they’re
most interested in. By providing training and career development, you help employees develop new
skills which is an asset for your business and a way of showing you care about your employees
future, which in turn builds loyalty.
 Troubleshoot problem areas.
Be clear with staff about your expectations. When you hit a trouble spot, give them specific, timely
feedback about what isn’t working. Together, try and find a solution that works for everyone. For
example, if an employee is consistently late to work, talk to them about how their tardiness impacts
other people, learning more about the root cause. Once you have more empathy about what’s going
on it will be easier to come up with an appropriate solution together.
 Know when to let someone go.
One underperformer on the team can reduce the team’s productivity by 30 to 40 percent, but if you
do come across a few bad apples, don’t be too quick to hand them the pink slip. Instead, show them
you’re willing to help them get better before giving up. (See number four.) If their behavior doesn’t
improve, or gets worse, it could be time to part ways. This can be especially hard if you used to be
able to really count on them and their work ethic has deteriorated, or if they’ve been working for you
for a while and you like them personally. It’s not easy to fire people (be sure to consult with a
professional to make sure you’re checking all the right legal boxes), but sometimes letting go of a
problem employee is what’s best for the business, and perhaps for them as well, since they may find
a new job which is hopefully a better fit.
 Management Styles

What are management styles and how do they differ? The consulting firm Hay-McBer identified six
different management styles which were popularized in Daniel Goleman’s best selling book
Emotional Intelligence. Their research states that the most effective leaders use four management
styles, typically in combination. Some styles are more productive than others depending on the
situation. We’ll go through each in turn:

Most effective management styles

 The Authoritative Style
The most effective management style, the authoritative leader is a “firm but fair” visionary who
gives their employees clear, long-term direction. This approach works in most work environments,
especially when the business lacks direction.
 The Affiliative Style
The goal of this type of manager is to create harmony between employees, keeping everyone happy.
This style is especially good to pull out of your management toolbox when you’re building a team,
need to boost morale, or foster better communication.
 The Democratic Style
This participative style aims to build consensus and commitment in the group. Perhaps most
effective with more experienced employees, the democratic style can contribute to high morale, and
the feeling that everyone has a stake in the business’s success.
 The Coaching Style
A highly effective management style, the coaching style’s main objective is to foster long-term
professional development in their employees. This style works best with motivated employees who
want to grow. It’s challenging when the manager is less experienced and may be less effective with
employees who are poor performers.

Least effective management styles

 The Coercive Style
This extremely controlling management style demands employees do what the boss tells them to.
Employees don’t learn much from this approach and can become frustrated not having autonomy. It
should generally be avoided, though it is effective when there’s a legitimate crisis.
 The Pacesetting Style
This management style should be used sparingly at most, and if used, should only be deployed
alongside other styles from the top section. The goal of this style is to complete tasks to a very high
CHAPTER-2

PRODUCTION/SERIVCE
DEPARTMENT
Role of a General Contractor
After knowing the definition of the general contractor, it now turns to understand the roles and
responsibilities the general contractor has in the construction project. A few essential roles of a
general contractor are discussed in brief hereafter.
Planning and managing
Though the contractor's entry is at the execution phase, the daily planning and managing jobs like
resource planning, operating schedule and cost baselines, etc., fall under the scope of the contractor.
Managing the resource requirements and process of the project, along with activities like keeping
inventories, booking progress updates, payment of vendors and subcontractors, testing and inspection
schedules, etc., are essential activities carried out by the general contractor of the project.
Manage daily Jobsite operations
The daily activities of construction and building are to be managed by the general contractor.
Ensuring all tasks are on track, including the works of the sub-contractor, and managing the safety
and cleanliness of the worksite are responsibilities of the general contractor.

Sometimes, the responsibility includes obtaining the approvals and permits from the concerned
authorities, providing premise security, arranging temporary facilities, managing generated waste,
and site cleaning.
Provide required equipment and building materials
Based on the contracting terms, generally, the contractor is responsible for providing all the building
material and equipment needed to run the project. The contractor's responsibility is to verify the
vendors and ensure the quality of the material coming to the construction sites.
The responsibility also includes that all the materials should reach the site on time and are of desired
quality while keeping in mind the client's expectations and the project budget. If under-quality
materials are supplied, the general contractor must check and exchange them.
Coordinating subcontractors, consultants, and vendors
Many specialized sub-contractors are appointed on the site to carry out specific works. Also,
different design consultants are involved, along with vendors and suppliers of other building
materials and equipment used on sites. All these parties are managed and coordinated by the project's
general contractor.
Passing on the essential messages and information from the employer to the subcontractors,
consultants, and vendors is also the work done by the project's general contractor. The contractor's
role is to maintain coordination and sequence between these parties and their job in the construction
project.
Oversee quality, timeline, and budget

At all times in the project, the general contractor should maintain the required quality of the project
within the limits of time and budget set by the client. The contractor should minimize any time or
cost overruns and ensure the optimized value in the given cost.
Manage health, safety, and legal issues
The contractor must guarantee the health and safety of the job site workers on the construction site
by implementing required drills and procedures and raising awareness. The contractor is also
responsible for preventing any accidents from misusing the construction machinery and equipment.
It is the responsibility of the contractor to acquire the necessary licenses and permits from the
regulatory authorities before the start of the project. Also, the contractor has to ensure that no legal
rights are challenged and the processes follow the building codes applicably.
The main point of contact with the employer/client
A general contractor is the primary source of communication between the client and the other parties
involved in the construction. It is in the contractor's scope of responsibility to pass on correct
information from clients to the subcontractors and vendors and update the client with the project
progress on a timely basis.
In this communication chain, the contractor has to document every change and conversation between
the client and the different parties involved in the project.
CHAPTER-3

HUMAN RESOURCE DEPARTMENT

HR PRACTICES:

By leading with respect, we create an environment where people feel free to offer suggestions and
contribute ideas to be part of the organization’s success. Leading with respect creates an environment
where people genuinely care about each other and work welltogether to reach their full
potential.TheLeadingwith Respect principles are:
 Communicateideas clearly and simply
 Listen toothers
 Create an environment where people are comfortable expressing their thoughts
 Promote timely andon-going flowofinformation to and from others.
 Give andseek feedbackdevelop people bygiving and seeking constructive, specific
feedback, by providing direction and helping people stay on track and motivating
positive changes and inspiring exceptional work.
 Value unique contributionsandrecognize the contributions and good work of others
 Respect individuality
 Involve otherswhen making decisions and establishingpriorities. Valuing people fortheir
individual differenceis the key to building and sustaining success in business now and in
the future.
 Promote teamwork, create a commitment to common goals
 Resolve conflictsin a positive way and builda culture of camaraderie.Set a positive
example for conducting business in anethical manner, for managing your personal
behaviour and for creating apleasant and balanced work environment.

Human resources is the strategic management of an organization’s workforce. At its most basic, that
means managing all stages of each employee’s life cycle: being recruited, hired, onboarded, trained
and eventually, transitioned out of the organization.

In most companies, HR is also tasked with promoting each staff member’s professional
development, safety and morale while employed. To do that, an HR department has many tools at its
 disposal, including the company’s benefits plan, payroll, career development, anti-harassment
policies and workforce diversity initiatives.

In doing its work, HR serves multiple constituents:

 Employees, who seek workplace fairness, protections and resources.

 Leaders, who seek policies and structure to guide their management decisions.

 Shareholders, who depend on HR to spend wisely and earn a return on its investment.

 Lawmakers, local, state and federal, who look to HR to understand and enforce all statutes that
regulate employment.

Key Takeaways

 Human resources is a highly complex function. It serves four main constituents and requires
expertise in multiple disciplines.

 Human resources professionals manage all stages of an employee’s life cycle and promote staff
development and well-being.

 As a strategic business partner, human resources plays a key role in driving growth, customer
satisfaction and shareholder value.

Human Resources Explained

Labor represents the largest single expense for most businesses; in some companies, it’s as much as
70% of total business costs, according to experts. So it’s only logical that the HR function has
evolved to manage that expense and ensure a strong return on investment. The need may seem even
more acute when you consider that today’s workforce is the most diverse ever, and that all levels of
government have enacted laws regulating the employment relationship.

Generally, when a company reaches about 50 employees, people-related issues consume enough time
and require a high enough level of expertise to justify hiring a full-time HR professional and
equipping that person with the tools to succeed.

Today’s HR officers must be competent in several disciplines:

 Business metrics: Not only must HR leaders be able to understand financial information to a level
that would appear in a corporate annual report, they must also be able to effectively budget and
calculate the return on investment (ROI) of the work they do.
 Operations: To hire and train effectively, HR professionals must understand what employees do and
how their work contributes to the company’s goals and profits.

 The law: HR professionals needn’t be attorneys, but they do need to be able to define and recognize
potential liabilities such as discrimination or sexual harassment. They also need to be aware enough
to steer the company clear of legal landmines that range from wage and hour violations to protecting
the confidentiality of employee medical information.

 Technology: The days are long gone when job applicants responded to newspaper ads and
companies processed paychecks by hand. Consequently, HR leaders must be tech-savvy. Their
expertise may range from the basics of social media — often integral to recruiting — to the human
resources management systems (HRMS) that consolidate many HR functions and provide invaluable
insights to help with the previous three disciplines.

In addition, HR professionals must have expert people skills. At one level, they must navigate the
internal politics of their organizations. But they must also earn the trust of employees seeking help
with difficult, often emotionally fraught problems.
CHAPTER -4

MARKETING DEPARTMEN
When it comes to marketing strategies, there always seems to be too many to consider.

marketing has many different elements, like social media, SEO, content, email, and much
more. Trying to approach all the different areas of digital marketing can make it hard for
marketers to stay focused.

That’s where the 5 P’s of marketing come in.

These P’s represent core values that make up the foundation of marketing and help align
values within an organization.

When you let the 5 P’s of marketing become the focal point of your marketing initiatives, it
doesn’t matter what specific strategies you pick — you’ll still have a common goal.

But what are these 5 P’s of marketing?

Why do they really matter?

How do brands use them to achieve digital marketing success?

In this article, we’ll take a look at those questions and help you understand the 5 P’s of
marketing and their importance to your business.

What are the 5 P’s of Marketing?

The 5 P’s of marketing are part of what is often referred to as a “marketing mix”.

A marketing mix is the actions brands take to market their products and services by using a
specific framework with the five biggest components of successful marketing: product,
place, price, promotion, and people.
These five core tenants have become the foundation for a marketing mix, and have been used
in business since the 1940s.

While originally “people” was left unsaid, modern marketers tend to add that into their
marketing mix to create what we commonly refer to as the 5 P’s of marketing.

1. Product

Your product is what you offer to customers.

Whether it’s a physical product or a service, your offerings to consumers are the first core
principle that makes up your marketing strategies.

Your product includes the function, branding, appearance, warranty, quality, and even
the packaging of your product or service.

2. Place

The place of marketing refers to the time at which your products reach customers and the
channels you use to get them there.

That includes things like your distribution channels, logistics, market coverage, and levels
of service.

You always want your products to get to the right people in the right place at the right time, so
this element offers important benefits.

3. Price

Your pricing refers to the price of each product or the levels of pricing on services.

It’s essentially your marketing strategy for making a profit, and needs to include the cost of
goods, the advertised price, discounts, sales, and payments.

Pricing affects how your goods are viewed by consumers, and can impact your brand reputation
as affordable or high-end.

4. Promotion
Promotion refers to the ways in which you promote your products and services and how you
get information about those products and services in front of your audiences.

This can include many of the day-to-day elements of digital marketing, like social media,
advertising, and SEO strategies.

5. People

Businesses and brands don’t run by themselves.

People are an essential component in how your company functions, from your internal
employees to customers to partners.

You need to think about the needs and functions of groups inside your organization and the
needs and wants of your customer base.

From internal satisfaction to customer reviews, the people are the core of your business.

Other Marketing Mix P’s

While these 5 P’s are the core behind a marketing foundational strategy, there are a few other
P’s that many marketers want to place into their marketing mix, depending on what type of
business you have.

Here are a few of the other P’s you might want to think about separating into their own
specific categories when creating your marketing mix.

Process

This is the next most common element to get added to a marketing mix, as it’s all about the
ways in which you deliver your products and services to customers, which can be an
important part of your marketing strategy.

Physical Evidence

This is the tangible parts of your products or services that can be delivered into the hands of
customers and the proof of delivery.

Partners
If you work closely with partners like distributors or other marketing partners, then you might
want to consider adding those outside your internal network into your marketing mix.

Payment

This refers to the ways and methods that you hold and process all your transactions and
payments.

Packaging

Packaging refers to the physical appearance and presentation of your products and services.

Perception

Your brand’s reputation and the way that you are perceived by your own audiences is a huge
part of modern digital marketing strategies and is often a key component in foundational
marketing frameworks.
CHAPTER- 6

SUGGESTION AND CONCLUSION

 THE CONCLUSION:

Be it the general contractor or any other project stakeholder, it is imperative to define roles and
understand them clearly before initiating any projects. As the general contractor, loads of
responsibilities are on the shoulder, which should be carefully related to project success.
Every project is a unique endeavor. So, defining the specific and crisp role of the general contractor
can be questionable as they provide multi-functional services that can vary with the project based on
the contract and scope of work. However, in a nutshell, the primary role remains the same while the
digital transformations have paved the way for new approaches to the contractor's duties.
I hope this quick read was informative. Bulked with tones of responsibility? digiQC can oversee your
quality management for the projects. This digital software-based solution is among the best practices
that can be followed to ensure quality on construction sites. It also provides solutions for general
contractors.

Some of the issues faced by today’s contactors and agent include:

1. Disintermediation:
The growth of the Internet as a communication and distribution channel has lead many to
conclude that wholesaling will lose its importance as manufacturers and final buyers learn to
transact directly. This so called “disintermediation” of marketing channels is a real concern to
some wholesalers, especially those that do not function as a dominate party within a distribution
channel.
For example, assume a retailer operating a gift card store uses a wholesaler only to purchase a
specific manufacturer’s products. In this situation, if the manufacturer begins to offer direct
purchasing to smaller customers the wholesaler may have little leverage in efforts to retain the
retailer as a customer.
In instances of disintermediation wholesalers face the challenge of creating greater value for
their services, thus making the retailer’s decision to switch more difficult.
2. Facility Location:
Wholesalers who are heavily involved in product shipment may spend considerable time
evaluating sites for locating facilities. For organizations needing very large facilities, the
decision as to where to locate becomes more difficult and more expensive the closer the
location is to major metropolitan areas.
In fact, land costs in some regions of the world have risen so high that utilizing this space for
wholesaling operations may not be feasible. In addition to land costs, facility location is also
affected by access to adequate transportation, such as roads, seaports, airports and rail
terminals. Areas with available land often lack the infrastructure needed to run wholesale
facilities unless expensive and time- consuming improvements (e.g., build highway, extend rail
line, etc.) are made.
3. Transportation Costs:
For wholesalers involved in transporting products, the worldwide rise in fuel costs has forced
a close examination of how they handle product distribution. Transportation expense can
represent a significant portion of overall distribution costs and these higher costs are often
passed on to customers in the form of higher product prices.
This problem also presents opportunities for wholesalers that work hard to control fuel costs
with such methods as, using equipment and delivery vehicles that are more fuel efficient;
utilizing computer routing software to determine less costly delivery routes, and offering
greater incentives to customers to accept deliveries during less congested times of the day.
4. Adapting to New Technologies:
In addition to technologies to lower fuel costs, other technologies that assist the distribution
process are offering both advantages and disadvantages to wholesalers. On one hand new
technologies, such as radio frequency identification tags (RFID) placed on shipped products
allow wholesalers to maintain tighter control over their distribution activities. But gaining the
benefits associated with these new distribution technologies can be expensive in terms of
acquiring and learning to use.
5. Offering Non-Product Assistance:
Wholesalers are finding that offering products is not the only thing of interest to their buyers.
Many customers also want wholesalers to offer additional Value-added services.