Theory question 107
Distributive TradeSection B
Middlemen do encounter problems in the process of carrying out their businesses. Explain.
Show the model answer
Model answer
Problems of middlemen:
1. Poor transport and communication networks.
2. Inadequate storage facilities; perishable goods spoil.
3. Lack of capital and credit facilities.
4. High taxes, levies and multiple charges.
5. Government price controls and policies.
6. Bad debts from customers given credit.
7. Competition from producers selling directly and from other middlemen.
8. Insecurity – theft and armed robbery.
9. Fluctuations in prices and supply; risks of loss.
10. Poor power supply and high operating costs.
Explanation
Explain each problem.