Question

If wholesaler is eliminated from the chain of intermediaries, what difficulties would the manufacturer have to face? Explain by any six points.​

Answer 1

Required Answer

• If wholesaler is eliminated from the chain of intermediaries, the manufacturer would not avail the benefit of the services offered by the wholesaler to the manufacturer as goods and services.

⠀

$\small{\underline{\sf{\red{Services\: rendered\: by\: wholesaler\: to\: manufacturer}}}}$

⠀

1. Facilitating large scale production

• Wholesaler collect small orders from a number of retailers and pass on the pool of such orders to the manufacturers and purchases in bulk quantities.
• This enables the producers/manufacturers to undertake production on a large scale and take advantage of the economies of scale.

⠀

2. Bearing risk

• Wholesalers Dil in goods in their own name, taketake delivery of the goods and keep the goods purchased in large lots in their warehouses.
• In the process, de beer variety of risk such as the risk of fall in prices, theft, fire spoilage, etc.
• To that extent, they relieve the manufacturers from bearing these risks.

⠀

3. Fonancial assistance

• The wholesalers provide financial assistant to the manufacturers in the serve that they generally make cash payment for the goods purchased by them.
• Sometimes, they also advance money to the producers for bulk orders placed by them.

⠀

4. Help in marketing function

• The distribution of goods to a number of retailers who, in turn, sale these goods to a large number of customers spread over a large geographical area.
• This relieves the manufacturers from many of the marketing activities and enable them to concentrate on the production activity.

⠀

5. Facilitate production continuity

• The wholesalers facilitate continuity of production activity throughout the year by purchasing the goods as and when these are produced and storing them till the time these are demanded by retailers or customers in the market.

⠀

6. Storage

• Wholesalers take delivery of goods when these are produced in factory and keep them in their godowns/warehouses. This red uses bi the burden of manufacturers of providing for storage facilities for the finished products. They, thus, provide time utility.