Advantages and Disadvantages of the Wholesaler

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

Topics in Economics

Advantages of Inflation Disadvantages of Inflation Concept of Inflation 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

Academic Questions in Economics

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

A _____ market provides a platform whereby job seekers link up with employers in an attempt to be hired.

  • A. Wholesale market

  • B. Bond market

  • C. Physical market

  • D. Virtual market

  • E. Factor Market

  • F. Labor Market

Which of the following is not a type of market based on commodities bought and sold?

  • A. Wholesale market

  • B. Bond market

  • C. Physical market

  • D. Virtual market

  • E. Factor Market

  • F. Labor Market

According to economists, a market refers to a/an _____ comprising of various buyers and sellers carrying out business transactions.

  • A. Place

  • B. Location

  • C. Entire area

  • D. Online platform

  • E. Avenue

  • F. Axis

Primary market is a type of market based on _____.

  • A. Market structure

  • B. Demand

  • C. Supply

  • D. Commodities bought and sold

  • E. Channel of distribution

  • F. Internet and world wide web

Pice elasticity of supply - Len Academy

The above diagram on the quantity supplied against a change in price is _____.

  • A. Elastic

  • B. Inelastic

  • C. Perfectly Elastic

  • D. Perfectly Inelastic

  • E. Zero Elastic

  • F. Unitary Elastic

The rate at which an increase in the price of a product translate into the product's increased production and availability in the market is termed _____.

  • A. Demand

  • B. Supply

  • C. Demand Elasticity

  • D. Supply Elasticity

  • E. Demand Curve

  • F. Supply Curve

Concerning demand curve, which of the following statement is incorrect?

  • A. It is a graphical represention of a table showing the price of commodities and quantity demanded

  • B. It can be an individual demand curve

  • C. The x-axis shows the price of commodities

  • D. The price and quantity demanded are expressed on different axis of the graph

  • E. It can be a market demand curve

  • F. All the options are correct

A table that shows the price of a commodity and the quantity demanded is termed _____.

  • A. Price table

  • B. Demand table

  • C. Demanded-price table

  • D. Demand preference table

  • E. Demand graph

  • F. Demand schedule



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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


A Black market is said to take place when there is illegal buying and selling of goods and services.

Black markets usually take place outside the government's rader and without government's knowledge so as to avoid tax or any other government regulations.

Black market presents the avenue for government prohibited goods like hard drugs, war weapons and firearms to be bought by criminals.

A black market can also occur on the web for cyber criminals or those who are involved in computer hacking. To achieve their malicious aim, these individuals will go into the dark web and purchase or rent their respective hacking tools for a fee. Normally, payments are made in crypto currencies.

However, a black market isn't generally considered as bad. Infact, it has its advantages and disadvantages.

Please read more on black market here

Below are definitions of demand from the perspective of some notable professors:

The demand for goods is a schedule of the amounts that buyers would be willing to purchase at all possible prices at any one instant of a time.

Professor Mayers

Demand is the various quantities of goods that would be purchased per time period at different prices in a given market.

Professor Hibdon

The demand for anything, at a given price is the amount of it which will be bought per unit of time at the price.

Professor Benham

Generally, demand is defined as the willingness of a person, buyer or consumer to buy a specific quantity of goods or service at a given price and time.

From the above definitions, we can infer that the definition of demand is referenced to three major factors. These are:

  1. Quantity of Goods Demanded

  2. Price

  3. Time

Please read more on the concept of demand here.

In economics, we have various types of cost. These are:

  • Accounting cost

  • Economic cost

  • Outlay cost

  • Opportinity cost

  • Fixed cost

  • Variable cost

  • Direct cost

  • Indirect cost

  • Sunk cost

  • Incremental cost

  • Private cost

  • Social cost

Please read the explanations on the aforementioned types of cost here

Below are some advantages of black market:

  • Goods and services are sold at a cheaper price.

  • It helps some people make plenty of money.

  • The illegal sales of human organs, for example, the sale of human kidneys have aided in saving some lives.

  • Some people actually depend on black market for their daily bread.

  • Some of the proceeds from black market may be utilized towards the economic growth of a nation. For instance, schools and hospitals had been built with money made from black market.

The law of supply states that:

The quantity of the supplied services or goods will increase as the price increases and they will decrease as the price decreases provided all other factors remain constant.

These constant factors are very important when stating the supply law. They include:

  • The price of input resources

  • The kind of technology used during production

  • The number of suppliers

  • The number of buyers; and so on.


A graph that shows the relationship between the price of a product or service, and its quantity supplied is the supply curve.

Supply curve can be defined as a graphical representation of the direct relationship between the prices of goods and services and the quantity supplied (of such goods and services) within a particular period of time provided all other factors remain constant.

Len Academy - Supply CurvePlease read more on the law of supply and supply curve here