Lesson 7, Topic 2
Functions of Credit to the Retailer and Wholesaler
Functions of Credit to the wholesaler
- They are used to acquire assets required for the wholesalers’ business.
- They are used to finance the production of the goods sold by the wholesaler.
- They are used to expand the business.
- The wholesaler needs to finance his business since he also grants credit facilities to the manufacturer and the retailer as well.
- The wholesaler buys goods in bulk; he may not afford to do that with the limited resources within his reach.
- They help the wholesaler to buy goods in bulk whenever he anticipates a likely rise in the price of goods.
Functions of Credit to the Retailer
- They are used in acquiring assets and facilities needed for the retailer’s business.
- They help the retailer to finance his business, particularly in buying goods from the wholesaler.
- A retailer obtains credit in order to buy goods at low costs with the aim of maximizing profit.