Distributive Trade


Overview: Distributive trade plays a crucial role in the economic landscape of any society, serving as the link between producers and consumers in the market. It encompasses the activities involved in the distribution of goods and services from the point of production to the final consumers. Understanding the concept of distributive trade is essential for grasping the dynamics of the market structure and the functioning of various economic agents involved in the distribution process. Producers, as key players in distributive trade, are responsible for creating goods and services to meet the demands of consumers. Their role extends beyond production to include activities such as packaging, branding, and transportation of goods to distribution points. Producers play a pivotal role in shaping the supply side of the market and influencing pricing decisions based on production costs and market trends. Wholesalers, on the other hand, act as intermediaries between producers and retailers. They purchase goods in large quantities from producers and sell them in smaller lots to retailers. Wholesalers help in reducing the bulk of goods for retailers, offering storage facilities, and facilitating the movement of goods across different regions. Their efficiency in bulk buying and selling helps in maintaining price stability and ensuring the availability of goods in the market. Retailers, the final link in the distribution chain, directly interact with consumers by providing goods and services in convenient locations. They play a crucial role in connecting producers' products with end-users, offering various choices and personalized services to consumers. Retailers contribute significantly to the economy by creating employment opportunities, stimulating local demand, and enhancing market competition through their diverse offerings. Co-operatives represent a unique form of distributive trade where individuals come together to collectively engage in production, distribution, or consumption activities. Operating on the principles of mutual assistance and democratic decision-making, co-operatives promote community development, social cohesion, and economic empowerment. They serve as a sustainable business model that prioritizes social welfare alongside economic gains. Government agencies also play a vital role in product distribution through regulatory frameworks, infrastructure development, and market interventions. They ensure fair practices, quality standards, and consumer protection in the distribution process, safeguarding the interests of all stakeholders. Additionally, government intervention becomes necessary in addressing distribution problems such as hoarding, smuggling, price gouging, and unfair trade practices through policy measures and enforcement actions. In conclusion, distributive trade forms the backbone of the economic system, facilitating the flow of goods and services from producers to consumers efficiently. Understanding the roles of producers, wholesalers, retailers, co-operatives, and government agencies in the distribution process is crucial for analyzing market dynamics, promoting economic growth, and ensuring welfare enhancement for all participants.


  1. Identify the problems of distribution and their solutions
  2. Analyze the role of producers in distributive trade
  3. Explain the role of wholesalers in distributive trade
  4. Examine the role of government agencies in product distribution
  5. Discuss the role of retailers in distributive trade
  6. Understand the concept of distributive trade
  7. Evaluate the role of co-operatives in distributive trade

Lesson Note

Distributive trade plays a significant role in the economy by ensuring that goods move from producers to consumers. It encompasses various activities such as transportation, warehousing, and retailing, essential for the smooth flow of goods.

Lesson Evaluation

Congratulations on completing the lesson on Distributive Trade. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.

You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.

Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.

  1. What is Distributive Trade? A. The buying and selling of goods and services between producers and consumers B. The process of distributing profits among shareholders C. The exchange of goods and services within a company D. The movement of goods from one country to another Answer: A. The buying and selling of goods and services between producers and consumers
  2. What is the role of wholesalers in distributive trade? A. Sell goods directly to consumers in small quantities B. Buy goods in large quantities from producers and sell them to retailers C. Manage the production process in a factory D. Provide financial support to start-up businesses Answer: B. Buy goods in large quantities from producers and sell them to retailers
  3. What is the main function of retailers in the distributive trade process? A. Produce goods and services B. Distribute profits to shareholders C. Market products to consumers D. Provide goods directly to producers Answer: C. Market products to consumers
  4. How do co-operatives contribute to distributive trade? A. They centralize all distribution processes within a government agency B. They facilitate joint buying and selling by a group of producers or consumers C. They focus on maximizing profits for individual producers D. They work independently of other entities in the distribution chain Answer: B. They facilitate joint buying and selling by a group of producers or consumers
  5. What is the significance of government agencies in product distribution? A. They intervene in market dynamics to control prices B. They limit the availability of goods to create scarcity C. They prioritize profits over distribution efficiency D. They have no role in regulating product distribution Answer: A. They intervene in market dynamics to control prices

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Past Questions

Wondering what past questions for this topic looks like? Here are a number of questions about Distributive Trade from previous years

Question 1 Report

Part-time workers who desire full-time employment are:

Question 1 Report

The type of unemployment found among workers who leave their jobs in search of other jobs is termed

Question 1 Report

These are the objectives of industrial strategies in Nigeria EXCEPT

Practice a number of Distributive Trade past questions