Distribution Channels

What is the main function of wholesalers in the distribution channel?

• To set retail prices for products

• To provide services to consumers

• To manufacture products directly

• To buy large quantities of products from manufacturers and sell smaller quantities to retailers.

Answer explanation

To buy large quantities of products from manufacturers and sell smaller quantities to retailers.

Explain the concept of direct distribution and provide an example.

• Direct distribution involves selling products through a complex network of intermediaries.

• An example of direct distribution is when a company uses multiple distributors to reach customers.

• Direct distribution is when a company only sells products through third-party retailers.

• An example of direct distribution is Apple selling its products through its own retail stores and website, bypassing third-party retailers.

Answer explanation

An example of direct distribution is Apple selling its products through its own retail stores and website, bypassing third-party retailers.

How do wholesalers differ from retailers in terms of their target customers?

• Wholesalers target businesses and retailers, selling in smaller quantities at higher prices; retailers target individual consumers, selling in bulk at lower prices.

• Wholesalers target businesses and retailers, selling in bulk at lower prices; retailers target individual consumers, selling in smaller quantities at higher prices.

• Wholesalers target businesses only, selling in bulk at higher prices; retailers target individual consumers only, selling in smaller quantities at lower prices.

• Wholesalers target individual consumers and retailers, selling in bulk at higher prices; retailers target businesses, selling in smaller quantities at lower prices.

Answer explanation

Wholesalers target businesses and retailers, selling in bulk at lower prices; retailers target individual consumers, selling in smaller quantities at higher prices.

What are the benefits of using wholesalers in the distribution channel?

• Direct interaction with end consumers, higher profit margins, increased brand visibility

• Lower costs, faster delivery times, wider market coverage

• Efficient inventory management, reduced storage space, specialized product knowledge

• Buying in bulk, negotiating better prices, reaching small retailers

Answer explanation

Buying in bulk allows for cost savings, negotiating better prices with wholesalers can lead to better profit margins, and reaching small retailers expands market reach.

What role do retailers play in the distribution process?

• Retailers act as intermediaries between manufacturers and wholesalers.

• Retailers set wholesale prices for products.

• Retailers sell products directly to end consumers.

• Retailers provide after-sales services to customers.

Answer explanation

Retailers sell products directly to end consumers.