(a)State four functions of wholesaler to a retailer. (b) Explain five advantages of small scale retail business over a large scale business.

Answer Details

(a) Four functions of a wholesaler to a retailer

1. Breaking bulk: he buys in large quantities and sells to retailers in the smaller quantities they can handle.
2. Granting credit: he supplies goods to trusted retailers on credit, helping them trade with little capital.
3. Provision of storage: by warehousing goods, he saves the retailer the cost and risk of storing large stocks.
4. Provision of information and advice: he informs retailers about new products, prices and market conditions, and delivers goods to them.

(b) Five advantages of small-scale over large-scale retail business

1. Small capital requirement: it needs little capital to start and run, so it is easy to set up.
2. Personal contact with customers: the owner knows his customers personally and can give them individual attention and advice.
3. Flexibility: it can quickly adjust its stock and adapt to changes in customers' tastes and local demand.
4. Nearness to customers: it is usually located within the neighbourhood, making it convenient for buyers.
5. Granting of credit and quick decisions: the owner can readily give credit to known customers and take prompt decisions since he manages the business himself, and running costs are low.