Which of the following reasons could induce a manufacturer to bypass the wholesaler in the distribution chain?
Answer Details
A manufacturer may choose to bypass the wholesaler in the distribution chain for several reasons.
One reason could be to provide the quantity needed by retailers. If the manufacturer has a large number of retailers ordering smaller quantities of the product, it may be more efficient for the manufacturer to sell directly to the retailers rather than going through a wholesaler. This allows the manufacturer to provide the quantity needed by each retailer and eliminate the additional costs and time associated with working through a middleman.
Another reason could be to collect useful information on their product. By selling directly to retailers, the manufacturer can gain more insight into how their product is performing in the market. They can collect data on which products are selling best, where they are selling best, and how much of the product is being sold. This information can be used to improve the product and better target specific markets.
A third reason could be to provide warehousing facilities. If the manufacturer has excess storage capacity, they may choose to bypass the wholesaler and offer warehousing facilities directly to the retailers. This allows the retailers to store their products closer to their customers, reducing transportation costs and improving delivery times.
Violating government regulations on distribution is not a valid reason for a manufacturer to bypass the wholesaler. Doing so can result in legal consequences and damage the manufacturer's reputation.
Therefore, the correct answer is: To provide the quantity needed by retailers, to collect useful information on their product, or to provide warehousing facilities.