if the wholesaler is eliminated what difficulties do you think the manufacture will face ?
Solution:
In the absence of wholesalers, manufacture will face the following difficulties:
1.Problem in Storage:When wholesalers purchase goods in bulk quantities from manufacturers, they store these goods in their godowns or warehouses, reducing manufacturers’ burden of finding proper storage .But in the absence of wholesalers,producers will have to perform the storage function.
2.Difficulty in collecting market information:Wholesalers provide a variety of information to manufacturers aabout the tastes and preferences of customers, conditions prevailing in the market, level of competition in the market and types of goods and features demanded by consumers. But in the absence of wholesalers,producers will have to collect the market information.
3.Burden of physical distribution of goods:Wholesalers often purchase goods in bulk quantities from manufacturers. Once a purchase is made, the wholesalers distribute the goods in small quantities to retailers for further resale.In the absence of wholesalers,both producers and retailers will have to bear the burden of distribution of goods.
4.Bearing risk:Wholesalers deal in goods in their own name,take delivery of the goods.In the process they bear the variety of risks but if the wholesalers are eliminated then manufacturers will have to bear the risk.
In the absence of wholesalers, manufacture will face the following difficulties:
1.Problem in Storage:When wholesalers purchase goods in bulk quantities from manufacturers, they store these goods in their godowns or warehouses, reducing manufacturers’ burden of finding proper storage .But in the absence of wholesalers,producers will have to perform the storage function.
2.Difficulty in collecting market information:Wholesalers provide a variety of information to manufacturers aabout the tastes and preferences of customers, conditions prevailing in the market, level of competition in the market and types of goods and features demanded by consumers. But in the absence of wholesalers,producers will have to collect the market information.
3.Burden of physical distribution of goods:Wholesalers often purchase goods in bulk quantities from manufacturers. Once a purchase is made, the wholesalers distribute the goods in small quantities to retailers for further resale.In the absence of wholesalers,both producers and retailers will have to bear the burden of distribution of goods.
4.Bearing risk:Wholesalers deal in goods in their own name,take delivery of the goods.In the process they bear the variety of risks but if the wholesalers are eliminated then manufacturers will have to bear the risk.