(a) State five functions performed by the wholesaler in the channel of distribution. (b) Explain five factors that encourage the elimination of middlemen fr...

(a) Five functions performed by the wholesaler in the channel of distribution

1. Breaking bulk: He buys goods in large quantities from manufacturers and sells them in smaller quantities to retailers.
2. Storage (warehousing): He stores goods in his warehouse and releases them steadily, thereby bridging the time gap between production and consumption.
3. Provision of finance: He gives credit to retailers and pays cash to manufacturers, thereby financing both sides of the trade.
4. Bearing of risk: He bears risks such as fall in prices, damage, deterioration and spoilage while the goods are in his possession.
5. Transportation: He arranges for the movement of goods from the manufacturer to his warehouse and from there to the retailers.

Other functions include grading, packaging, branding and giving market information to manufacturers.

(b) Five factors that encourage the elimination of middlemen from the channel of distribution

1. Direct selling by producers: Manufacturers who sell directly to consumers through their own outlets or online remove the need for middlemen.
2. High cost of middlemen's services: The profit margins added by middlemen raise prices, so firms bypass them to reduce cost.
3. Growth of large-scale retailers: Big supermarkets and multiple shops buy directly from manufacturers in bulk, doing the wholesaler's work themselves.
4. Consumer cooperative societies: These buy directly from producers on behalf of members, cutting out the middlemen.
5. Improved communication and technology: The internet and e-commerce allow producers and consumers to deal directly without intermediaries.

Perishable goods that must reach consumers quickly also encourage direct sale.