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SS1: ECONOMICS - 3RD TERM

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  1. Mining | Week 1
    3 Topics
    |
    1 Quiz
  2. Financial Institution I | Week 2
    7 Topics
    |
    1 Quiz
  3. Financial Institutions II | Week 3
    5 Topics
    |
    1 Quiz
  4. Financial Institutions III | Week 4
    5 Topics
    |
    1 Quiz
  5. Business Organisation | Week 5
    3 Topics
  6. Money | Week 6
    5 Topics
    |
    1 Quiz
  7. Channels of Distribution I | Week 7
    5 Topics
    |
    1 Quiz
  8. Channels of Distribution II | Week 8
    6 Topics
    |
    1 Quiz
  9. Business Finance | Week 9
    7 Topics
    |
    1 Quiz



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Lesson 8, Topic 1
In Progress

Some Reasons that May Warrant the Termination of the Middleman in the Channel of Distribution

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(i) When Perishable Goods are Involved: The manufacturer sells these goods directly to the consumers because they do not require long storage.

(ii) The Establishment of Warehouses by the Manufacturers: By doing this, the functions of the wholesaler of clearing and storing goods to create more spaces for further production will be eliminated.

(iii) When there is Wide Demand: In this case, the manufacturer will not need the services of the middlemen. They prefer to have direct contact with their consumers and influence the sales of their products.

(iv) When Consumers Combine their Order and Buy in Bulk: The consumers in this case will come together to form a consumer cooperative society.

(v) When Goods with Low rate of Turnover are Involved: These goods are usually expensive to the extent that only the rich consumers can afford them and therefore sold by their manufacturers, e.g. furniture.

(vi) Employment of Commercial Travelers or Salesmen: As a result of this, the services of the middlemen will be declared unwanted because the salesmen deal directly with the consumers by visiting them at their houses, market places, and along the roads. This enables them to increase their profit and also reduce prices for the consumer.

(vii) They hoard goods in order to raise the price of consumer goods.

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