Theory question 104
Distributive Trade(a) Outline the chain of distribution for manufactured consumer goods.
(b) Explain the functions of the (i) wholesaler; (ii) retailer;
Show the model answer
(a) Manufacturer → wholesaler → retailer → consumer (shorter chains may skip the wholesaler or retailer).
(b)(i) Wholesaler: buys in bulk from producers and breaks bulk; stores goods (warehousing); gives credit to retailers; finances producers by paying in advance; transports goods; grades and packages; gives market information to producers; stabilises prices.
(ii) Retailer: sells in small quantities to consumers; stocks a variety of goods; gives credit and after-sales services; delivers goods; advises consumers; gives information to wholesalers and producers about consumer tastes; sells at convenient locations.
Give at least three functions for each middleman.