L2-2

Correct answer for the lesson 2

Independent practice And closure of the lesson

1. SERVICES TO WHOLESALERS

Provide ready market: the manufacturer produces goods in large quantities. As they buy in large orders for the purchase of goods, the manufactures is relieved from the trouble of finding out marker for his goods

Concentration on production: Wholesaler collects small orders from the number of retailers and place bulk orders in advance. In the absence wholesales, the producer has to deal with numerous retailers. The causes much expenses and delay to the producer.

Provide finance: Wholesaler purchase goods in large quantities and make immediate payments. It enables the manufactures to continue the production without interpretation.

Economies of scale: As the wholesaler place bulk orders, the manufactures are able to undertake production on a large scale by using modern technology

Regulate Production: Wholesalers have constant touch with retailers. Hence they get regulate information regarding the change in taste, fashion and demand of the consumers. Such changes are indicated by the orders placed by the wholesalers.

2. SERVICES TO RETAILERS

Provide credit facilities: The retailers may not have sufficient capital to stock different varieties of goods. The wholesalers providing credit facilities to the retailers assist him in managing his business with very little capital

Warehousing: Due to lack of capital and limited storage facilities, the retailers cannot hold large quantities of different varieties of goods. The wholesalers stock the goods and supply them as and when they are required.

Sources of supply: A retailer is required to maintain a large variety of goods in sufficient quantities to meet the needs of the customers. Wholesalers help his by supplying goods relatively at regular interval in small quantities.

Expert advice: A wholesaler is an expert and specialist in his line of business. Hence, he is in a position to advice the retailers on important matters such as quality, durability, price and timing of purchase etc.

Risk taking: the wholesaler by holding large quantities of goods assume the risk of spoilage or damage of goods price fluctuations