Economics

Advantages and Disadvantages of the Wholesaler

len Alfred Ajibola - Wed, 12th February, 2020 @ 15:58: PM

Topics in Economics

Scheme of work for Economics, SS1, First Term Scheme of work for Economics, SS1, Second Term Scheme of Work for Economics, SS1, Third Term Functions of the Wholesaler Advantages and Disadvantages of the Wholesaler Wholesale Market: Who is a Wholesaler? Characteristics of the Wholesaler Retail Market: Who is a Retailer and Examples of Retailers Market: Types of Market Market - What is a Market in Economics? Elasticity of Supply: Types of Supply Elasticity Supply Elasticity: Elasticity of Supply explained Demand Schedule - Types of Demand Schedule Demand: What is Demand? Law of Demand Concept and Types of Cost Supply, Supply Curve and Law of Supply What is a Black Market, Its advantages and disadvantages Supply Curve, Graphical representation of Supply Curve Scale of Preference and Opportunity Cost


Academic Questions in Economics

Please check out our Test Your Knowledge page to see all Questions and Answers

Budget deficit refers to the amount by which _____.

  1. total expenditure exceeds revenue
  2. capital expenditure exceeds revenue
  3. recurrent expenditure exceeds revenue
  4. recurrent expenditure exceeds capital expenditure
  5. capital expenditure exceeds recurrent expenditure
  6. total expenditure exceeds capital and recurrent expenditure

What are infant industries in Economics?

  1. They are industries that are allowed enough time to mature for recognition
  2. They are industries that produce baby foods in addition to mother care products
  3. They are industries that are too young to compete in a thriving society
  4. They are industries that are constantly introducing new products
  5. They are industries that are under a parent company
  6. They are industries located in rural areas

Which of the theory did Malthus became popular for?

  • A. Population may outgrow the means of subsistence
  • B. The people will eventually decide not to have children
  • C. The death rate may become so high that people may not be able to produce
  • D. Migration of people from one place to another may leave the world barren
  • E. All of the above

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Advantages of the Wholesaler:

A wholesaler is a trader who purchases goods in large quantities from the manufacturer and resells them to retailers in small quantities.

Please read on Retail Market (Who is a Retailer?) here.

You can read on the Functions of the Wholesaler here.

Below are the Adavantages or Benefits of a wholesaler:


  1. They enjoy the benefit of buying from the producers at a very cheap rate. To this end, they make some good amount of profit by selling in large quantities to the retailers.
    Please read on Wholesale Market and the Wholesaler here.

  2. They provide employment opportunities either directly and indirectly. This is achieved through the hiring of agents, drivers, offloading personnels and so on.
    Please read on the Functions and Characteristics of Commerce here.

  3. The functions of the wholesaler may bring about an economies of scale. This implies that the prices of goods will fall because the producers end up manufacturing more goods through the wholesaler's action. This action of theirs can be attributed to the awareness and marketing activities carried out by the wholesalers on a product.
    Please read more on Inbound Marketing here.

  4. Their purchases are simplified (made easier) since they usually buy their products from only one manufacturer or producer. Time and money are saved through this act.
    Please read on Cheques as a Method of Payment here.

  5. They can bring about the production of better products due to product marketing, research and effective communication with the manufacturers.
    Please read on Advertising and Types of Advertising here.

  6. The wholesalers help to keep the prices of goods stable because they generally sell at a standardized price.
    Please read on Supply, Supply Curve and Law of Supply here.

  7. They receive huge discounts and preference from the producers because they buy in large quantities.
    Please read on Business and Characteristics of Business here.

 

Disadvantages of the Wholesaler

  1. Some wholesalers may instruct the manufactures to deliberately produce substantial goods for the people in their country. This very act had led to loss of lives and properties.
    Please read on the Disadvantages of Money here.

  2. For the sake of more profit, they may disrepute the name of the manufacturing company by adulterating their products. One way they go about this is by remaking the original product through the mixing of inferior quality goods to a manufacturer's superior quality goods. In short, the product becomes adulterated through their actions.
    Please read on Consumer Right and Protection here.

  3. Some wholesalers may bring about the loss of innocent lives by deliberately distributing the sale of fake or dangerous drugs.
    Please read on the Consequences and Solutions to Drug Trafficking here.

  4. The wholesaler might suffer a huge financial loss when they buy incorrectly checked products from the manufacturing company. Some of these products may become faulty before or during the time of storage.
    Please read on the Functions of the Wholesaler here.

  5. Since they are the link to the producers, they may negatively affects the product's sale by providing wrong information to the producers.
    You can read on Production here.

  6. Wholesalers that utilizes a rented warehouse will incur additional cost, thus bringing about a reduction in their profit.
    Please read on the Characteristics of the Wholesaler here.

  7. They may be involved in black market by illegally importing and selling firearms. Stealing and cultism will be encouraged through this acts.
    Please read more on Black Market, its Advantages and Disadvantages here.

  8. Wholesalers who may find themselves as the only supplier of a product may exploit the final consumers by selling at a much higher price. In this case, they become a monopolist of the product.
    Please read on Market and Types of Market here.

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Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.


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Amazing facts in Economics


NOTABLE POINTS IN Economics

Scale of Preference can be defined as the list of a person's needs or wants written in an order of importance. 📜✍️

When you have a limited amount of money and could only buy some of the items on your list (the top items on the list); then the remaining items that you didn't buy will be generally considered as your opportunity cost.

Opportunity cost can be defined as the value of the best alternative that a person could have achieved or bought but couldn't achieve after the best choice had been achieved.

Opportunity cost are of two types

  1. Explicit Opportunity Cost
  2. Implicit Opportunity Cost

Please read on scale of Preference, Opportunity cost and the types of Opportunity cost here

Economics isn't just about money. It isn't just about economizing or efficiency or prudence at management. In simple terms, Economics is a science that deals with the study of scarcity and choice.

Economics have 2 main branches. They are

  • Microeconomics
  • Macroeconomics