Question
Explain Five circumstances under which a manufacturer would find it advisable to distribute his goods through wholesalers.
Answer
i) Where the market is spread out thus making it uneconomical and expensive for the producer to sell directly.
ii) Where the producer does not have adequate capital to set up his own distribution network
iii) If there is a government policy which separates the functions of producing, wholesaling and retailing.
iv) Where the nature of goods requires the wholesaler to carry out certain services eg breaking of bulk, blending, sorting etc.
v) Where the producer lacks transport facilities which can be provided by the wholesaler
vi) Where there are small scale retailers who are likely to buy from wholesalers and not directly from the manufacturer.
vii) Where the manufacturer has no ability to manage distribution outlets.
ii) Where the producer does not have adequate capital to set up his own distribution network
iii) If there is a government policy which separates the functions of producing, wholesaling and retailing.
iv) Where the nature of goods requires the wholesaler to carry out certain services eg breaking of bulk, blending, sorting etc.
v) Where the producer lacks transport facilities which can be provided by the wholesaler
vi) Where there are small scale retailers who are likely to buy from wholesalers and not directly from the manufacturer.
vii) Where the manufacturer has no ability to manage distribution outlets.
Related Topics