Question

Write any two merits and two demerits of wholesale trade.

Hint:

Wholesaler = Link between manufacturer and retailer.

Answer 1

Step 1: Understanding wholesale trade.
Wholesale trade refers to buying goods in bulk from manufacturers and selling them in smaller lots to retailers.
Step 2: Merits.
1. Wholesalers help manufacturers by buying in bulk and reducing their storage burden.
2. Wholesalers provide goods to retailers in smaller quantities, ensuring availability.
Step 3: Demerits.
1. Presence of wholesalers may increase the cost of goods, as they add profit margins.
2. Sometimes wholesalers create artificial scarcity by hoarding goods.
Step 4: Conclusion.
Thus, wholesale trade is useful for smooth distribution but has drawbacks like higher prices and hoarding.