Wholesale Seller's And Retailer's Point Of View

First, a wholesale seller answers only for the goods that he can provide at a given moment. He considers all the requests, ordering them on one principle: the regular agents come first, less well known agents come last. Among regular agents, he chooses randomly.

Two elements are important for the wholesale seller when he has to make decision over the price of a transaction: if the retailer is considered as regular; the size of the basket it asks for.

Any retailer who asks for three units or more gets likely a 10% discount compared to the base price on the whole basket. A regular retailer has two advantages: it has priority over the other buyers when several of them are in competition for the same unit of good; it pays 10% less than the price it would have been proposed otherwise. A retailer is regarded as regular if it came to buy more than 20% of its stock in the last ten days (*memory length*), which means that it has asked for more than 10 products.

Retailer's point of view

Retailers can have two different attitudes on the market, either be loyal or be selfish. One describes these two attitudes through the associated behaviour:

Loyal behaviour

On the first time-step a loyal retailer goes to see its regular seller. If it is satisfied (managed to get the whole list of products for its day), it leaves the market. If it is not satisfied, it gathers information about who can provide him with the products it is looking for. It chooses the wholesale seller who can provide it with the more products (or chooses randomly among those that can provide the major part of its needed products). If satisfied or if it is a short stay, it goes out of the market. If not satisfied, It chooses the wholesale seller which can provide it with the major part of its needs.

Selfish behaviour

On the first time-step a selfish retailer gathers information. From the 5 sets of prices it gets, it selects the cheapest combination, and goes to all the related wholesale sellers. If it is satisfied, it leaves the market. If it is not satisfied, short stay, it goes to a second best combination, and then leaves the market, whatever the result. If it is long stay, it gathers new information (updated in terms of availability and prices). Chooses the best combination to go and ask for the products he wants.

Buying

For a loyal agent, Buying means to go and see one wholesale seller and ask to buy as many products as possible. For a Selfish agent, buying means to go to as many wholesale sellers as possible so that to get the best price on each product.

Information Gathering is an activity that enables the agents to know about the current stock of 5 randomly chosen wholesale sellers: the availability of the product and its price.

About the author:Chinese wholesalers and european wholesalers can be found at the global wholesale portal www.redwholesale.com.