NECO 2004 Economics · Question 28

Which of the following is NOT a function of the wholesaler in the distributive channel?

Options

  1. A.Bulk breaking
  2. B.Direct contact with end users
  3. C.Feedback information to manufacturers
  4. D.Public relations and advertising of products
  5. E.Storage facilities for finished products

Answer: B. Direct contact with end users

Explanation written with AI and checked against the answer key

Analyze the question: We need the one option that is NOT a function of the wholesaler. The wholesaler sits in the middle of the chain of distribution: Manufacturer → Wholesaler → Retailer → Consumer.

Concept: Functions of a wholesaler

  • Bulk breaking: buys in large quantities from manufacturers and sells in smaller lots to retailers.
  • Storage (warehousing): holds stock of finished goods, relieving manufacturers and retailers of storage costs.
  • Feedback information: passes on retailers' and consumers' tastes, complaints and market trends to manufacturers.
  • Financing/credit: gives credit to retailers and pays manufacturers promptly.
  • Advertising and promotion: often helps promote the manufacturers' products to retailers.
  • Risk bearing: takes on the risk of price changes, spoilage and theft.

Step-by-step check of the options:

  • A. Bulk breaking is a core wholesaler function. ✔
  • B. Direct contact with end users is the job of the retailer, not the wholesaler. The wholesaler deals mainly with retailers, not final consumers. ✘ (This is NOT a wholesaler function.)
  • C. Feedback to manufacturers is a wholesaler function. ✔
  • D. Public relations and advertising of products is a wholesaler function. ✔
  • E. Storage of finished products is a wholesaler function. ✔

Exam tip: Remember that the wholesaler is the "middleman for retailers," while the retailer is the "link to the consumer." If an option mentions selling directly to final consumers, it belongs to the retailer, not the wholesaler.

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