A wholesaler is a primarily B2B company that purchases goods in bulk from manufacturers and sells them on to retailers. The retailers in turn then sell these goods to the consumer, building an additional profit margin into the retail price to cover both the wholesale cost of the goods and the various operating expenses that make up their Cost of Goods Sold (COGS). Although most wholesalers sell to other businesses (predominantly retailers), there are some who also sell their goods directly to consumers. Show
Because wholesalers have relatively tiny profit margins compared to retailers, they typically sell goods in very large volumes, with retailers purchasing hundreds or even thousands of units when they order. Margins may vary significantly depending on the type of products being sold, which is why some wholesalers specialise in a particular product or range. According to Statista, the UK’s wholesale trade sector is expected to reach £854.9 billion in 2022, growing by 9% in 2021. In fact, wholesale trade organisations have reported the highest cumulative profits of any business sector in the UK. Wholesaler examplesThere are dozens of UK wholesalers operating at the time of writing. Some of these are physical ‘cash and carry’ wholesalers where retailers go to collect goods in bulk much like supermarket shoppers. Some are online wholesalers, delivering goods to retailers who purchase them over the internet. Some wholesalers sell exclusively to retailers, while others open their doors to the public. Bookers is the largest and arguably most ubiquitous UK wholesaler, reporting a turnover of £5,927 million in 2020 and profits of £200 million. This is almost half the profits of the entire sector for that year according to The Grocer. Other notable wholesalers operating in the UK include:
Wholesalers in contextNow we know what a wholesale business does. But where does it fit in the context of a business supply chain? For most consumer goods, the supply chain starts with suppliers of raw materials. These are sourced by manufacturers of finished goods who manufacture products to sell in bulk to wholesalers. Retailers then purchase the goods from the wholesalers and then sell them on to the end-users. While simple in principle, there are lots of opportunities for bottlenecks, delays and other inefficiencies, which is why many businesses use supply chain management solutions to ensure a smoother and more cost-effective supply chain. Frequently asked questions about wholesalersCan manufacturers also be wholesalers?Sometimes manufacturers may sell their own products to retailers or even directly to the consumer. This is most commonly seen in the manufacture of high-value, low-volume goods or made-to-order products. However, selling goods requires a substantial investment in infrastructure as well as a greater degree of risk, which is why many manufacturers sell goods in large volumes to wholesalers. What are the profit margins on wholesale products?Wholesalers typically have less of a profit margin when selling to retailers. While the percentage range will vary depending on the product, wholesalers usually make between 15% and 30% in profit, while retailers may typically make between 20% and 50% profit on the wholesale price when selling goods to consumers. What is wholesale banking?Wholesale banking refers to banks that act as the equivalent of wholesalers to the financial services industry. They sell financial products and services to institutional or corporate clients like pension funds or property developers who deal in much larger sums than individual consumers. In this way, they are different to consumer-facing retail banks like Barclays, Santander or HSBC. Alternatively, a wholesaler can be a type of salesperson employed by a company that creates and manages mutual funds. These people, also known as mutual fund representatives, sell these products to resellers who in turn make them available to individual investors.
NCERT Solutions for Class 11 Commerce Business studies Chapter 4 Internal Trade are provided here with simple step-by-step explanations. These solutions for Internal Trade are extremely popular among Class 11 Commerce students for Business studies Internal Trade Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the NCERT Book of Class 11 Commerce Business studies Chapter 4 are provided here for you for free. You will also love the ad-free experience on Meritnation’s NCERT Solutions. All NCERT Solutions for class Class 11 Commerce Business studies are prepared by experts and are 100% accurate. Page No 79:Question 1 (A.1):Select the proper option from the options given below and rewrite the sentences. A wholesaler invest ________ capital in the business. (a) Small Answer:A wholesaler invests largecapital in the business. Explanation: Page No 79:Question 1 (A.2):Select the proper option from the options given below and rewrite the sentences. A retailer purchases goods from ________. (a) Wholesaler Answer:A retailer purchases goods from wholesaler. Explanation: Page No 79:Question 1 (A.3):Select the proper option from the options given below and rewrite the sentences. Retailer is the ________ link in the chain of distribution. (a) First Answer:Retailer is the lastlink in the chain of distribution. Explanation: Page No 79:Question 1 (A.4):Select the proper option from the options given below and rewrite the sentences. Retailers supply market information to the ________ through wholesalers. (a) Manufacturers Answer:Retailers supply market information to the manufacturersthrough wholesalers. Explanation: Page No 79:Question 1 (A.5):Select the proper option from the options given below and rewrite the sentences. Prices charged by retailers are generally_______. (a) Higher Answer:Prices charged by retailers are generally lower. Explanation: Page No 79:Question 1 (A.6):Select the proper option from the options given below and rewrite the sentences. One price shop sales the goods at ________ prices. (a) High Answer:One price shop sales goods at lowprices. Explanation: Page No 79:Question 1 (A.7):Select the proper option from the options given below and rewrite the sentences. There is no salesman in the ________ shop. (a) Department Answer:There is no salesman in the supermarketshop. Explanation: Page No 79:Question 1 (A.8):Select the proper option from the options given below and rewrite the sentences. Maximum shopping convenience is available to the consumers at ________ stores. (a) Departmental Answer:Maximum shopping convenience is available to the consumers at departmentalstores. Explanation: Page No 80:Question 1 (B):Match the correct Pairs.
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Explanations: b) Market traders are small traders who have their shops open only on certain days of the week (i.e. market days). Generally, they only deal in a single type of good. Also, they do not have a fixed place where they sell their goods; rather, they roam from one place to another so as to cater to a large number of consumers. c) General stores are the most common shops, as they deal in goods meant for satisfying the day-to-day needs of the customers, e.g. grocery items and toiletry products. They are generally found in residential areas or local markets and operate for long hours. These stores also provide a variety of consumer services, such as credit facilities and home delivery of products. d) One price shops sell a wide variety of goods, such as stationery, toys and plastic goods, at a fixed price. The prices of goods sold in these shops are fixed in advance; hence, there is no scope of bargaining in one price shops. e) Peddlers are the oldest form of retailers. They generally sell goods that are low in price and quality. These retailers do not have any shops for operation and move from place to place carrying goods on their heads, cycles, rickshaws or carts to reach out to their customers. Page No 80:Question 1 (C.1):Write a word or phrase or a term which can substitute each one of the following statements. A retail shop which operates through branches. Answer:A retail shop which operates through branches - Chain store Explanation: Page No 80:Question 1 (C.2):Write a word or phrase or a term which can substitute each one of the following statements. A store where different shops are located under one roof. Answer:A store where different shops are located under one roof - Departmental store Explanation: Page No 80:Question 1 (C.3):Write a word or phrase or a term which can substitute each one of the following statements. A shop where all goods are available at same price. Answer:A shop where all goods are available at same price - One price shop Explanation: Page No 80:Question 1 (C.4):Write a word or phrase or a term which can substitute each one of the following statements. A person who moves from place to place to sell goods. Answer:A person who moves from place to place to sell goods - Itinerant retailer Explanation: Page No 80:Question 1 (C.5):Write a word or phrase or a term which can substitute each one of the following statements. A retailer who displays his goods on the road. Answer:A retailer who displays his goods on the road - Street trader
Explanation: Page No 80:Question 1 (C.6):Write a word or phrase or a term which can substitute each one of the following statements. A trader who purchases goods directly from the manufacturer or producer. Answer:A trader who purchases goods directly from the manufacturer or producer- Wholesaler Explanation: Page No 80:Question 1 (C.7):Write a word or phrase or a term which can substitute each one of the following statements. A trader who purchases goods from wholesalers. Answer:A trader who purchases goods from wholesalers- Retailer Explanation: Page No 80:Question 1 (C.8):Write a word or phrase or a term which can substitute each one of the following statements. The link in the chain of distribution. Answer:The link in the chain of distribution – Intermediaries or middlemen Explanation: Page No 80:Question 1 (C.9):Write a word or phrase or a term which can substitute each one of the following statements. The middlemen between producer and retailer. Answer:The middleman between producer and retailer- Wholesaler Explanation: Page No 80:Question 1 (C.10):Write a word or phrase or a term which can substitute each one of the following statements. The ultimate person in need of goods. Answer:The ultimate person in need of goods- Consumer Explanation: Page No 80:Question 2.1:Distinguish between the following. Itinerant Retailers and Fixed shop retailers. Answer:
Page No 80:Question 2.2:Distinguish between the following. Departmental Stores and Chain store. Answer:
Page No 80:Question 2.3:Distinguish between the following. Departmental Stores and Supermarket shop. Answer:
Page No 80:Question 2.4:Distinguish between the following. Chain Store and Supermarket shop. Answer:
Page No 80:Question 3:Write short notes on the following. Answer:1. The following are the main features of one price shop. 2. Speciality shops specialise in a particular segment of the market. They deal only in a particular type of product from the selected product line such as men’s wear or college books. The goods offered at such stores are available at reasonable rates. They generally sell all the brands that deal in that product type. For instance, a shoe store may provide all the varieties of shoe Brands, such as Carlton London, Adidas, Bata and Catwalk. 3. Chain stores are owned and operated by single organizations that specialise in the selling of a single line of products. They are retail stores that are generally spread across various localities and operate on a large scale by serving a large consumer base. The various branches in different localities are owned and managed by a single head office which controls the working of the overall organization. Some of the chain stores operating in India are Pizza Hut, Dominos, etc. 4. Hawkers and peddlers are the oldest form of retailers. They sell low-priced and low-standard goods at the doorsteps of consumers such as vegetables, articles, utensils and pens. Such retailers often do not have any fixed shop for conducting their operations. In fact, they carry their goods on cycles, rickshaws or carts in order to reach out to a large base of consumers. The capital required by such retailers is very small and the amount of stock carried by them is also limited. 5. Chamber of Commerce and Industry acts as a guardian of trade, commerce and industry to protect and promote the common interests and goals. It facilitates the activities related to the inter-state movement of goods by registering vehicles, formulating transport policies and by constructing roads and highways. They also charge Octroi and local taxes on goods or from people entering into a state or municipal boundaries. These taxes form an important source of revenue for the local government. The chamber of commerce and industry also helps in the development of sound infrastructure. Page No 80:Question 4.1:State with reasons whether the following statement are True or False. Retailer sells goods on cash basis. Answer:Retailer sells goods on cash basis- True Explanation: Page No 80:Question 4.2:State with reasons whether the following statement are True or False. Wholesaler deals in small quantity. Answer:Wholesaler deals in small quantity- False Explanation: Page No 81:Question 4.3:State with reasons whether the following statement are True or False. A retailer has no direct contact with consumers. Answer:A retailer has no direct contact with consumers- False Explanation: Page No 81:Question 4.4:State with reasons whether the following statement are True or False. Producer gets market information through wholesaler. Answer:Producer gets market information through wholesaler- True Explanation: Page No 81:Question 4.5:State with reasons whether the following statement are True or False. Wholesaler does not carry out any marketing functions. Answer:Wholesaler does not carry out any marketing functions- False Explanation: Page No 81:Question 4.6:State with reasons whether the following statement are True or False. Departmental store prefers central location. Answer:Departmental store prefers central location- True Explanation: Page No 81:Question 4.7:State with reasons whether the following statement are True or False. Supermarket shop offers home delivery facilities to customer. Answer:Supermarket shop offers home-delivery facility to customer- False Explanation: Page No 81:Question 4.8:State with reasons whether the following statement are True or False. Customers can easily bargain in one price shop. Answer:Customer can easily bargain in one price shop- False Explanation: Page No 81:Question 5:Write short answer of the following. Answer:1. The retailers who have fixed shops for their operations are known as non-itinerant traders. That is, they sell goods and services from fixed shops and do not move from place to place to serve their customers. For example, retailers functioning from fixed establishments in the local grocery market. Non-itinerant retailers may operate on a small scale basis as well as on a large scale basis. Under small scale shops, retailers deal in a variety of goods however, on a small scale via second hand shops or specialty shops. On the other hand, in large scale shops, the retailers invest huge capital and provide quality goods through shops such as departmental stores or chain stores. 2. Street stall holders are a type of itinerant retailers that operate at street crossings or on road-sides where the flow of traffic is high. They put up temporary stalls at crowded places such as bus stops, railway stations, etc., and mostly deal in goods such as clothes, shoes, grocery items and fast food items. They provide goods at lower rates and attract consumers by calling out or shouting about the goods. 3. General stores deal in goods meant for satisfying the day-to-day needs of the customers, e.g. grocery items, oils, stationary, plastic goods and toiletry products. They are generally found in residential areas or local markets and operate for long hours. These stores also provide a variety of consumer services, such as credit facilities and home delivery. Therefore, they are popular in the retail market. 4. The following are some of the functions of the wholesalers. 5. The following are some of the functions of a retailer. Page No 81:Question 6.1:Long answer type questions. What do you mean by itinerant retailers? Explain its features. Answer:Itinerant traders are retailers who do not have a fixed place of operation. That is, they do not have a shop from where they sell their products. They are also known as mobile traders, as they keep moving from place to place to sell their products. They are generally found on street sides and they shift their place of operation in search of more customers. They usually sell low-priced and non-standard goods. ii. Personal attention to customers: Itinerant traders deal directly with consumers and are, therefore, able to give more attention to them. iii. Easy availability at short notice: Itinerant traders move from place to place and provide goods at the customers’ doorsteps. iv. Lower possibility of losses: Itinerant traders deal in consumer goods that are low-priced and meant for daily use. Thus, the probability of their incurring losses is minimised. v. Wide range of goods: Itinerant retailers generally offer customers a wide variety of goods such as stationery, toiletry products, ice-creams and snacks. Page No 81:Question 6.2:Long answer type questions. What are the chain stores? Explain their system of selling goods? Answer:Chain stores refer to the stores that are owned and operated by single organizations that specialise in the selling of a single line of products. They are generally spread across different localities, so that it is convenient for customers to visit the stores. Some of the chain stores operating in India are Pizza Hut, Dominos, etc. The working of these chain stores follows a centralized pattern. That is, the head office generally practices centralised procurement of goods. The management and supervision of each of the chain stores is the responsibility of the branch manager of that store, who takes care of the daily operations. The stores are centrally controlled by the head office, which is responsible for policy-making and implementation. The prices of the goods offered by chain stores are fixed and low, and no bargaining is allowed. Although these stores provide a limited range of products but it works on a large scale and cover a wide geographical area for providing quality goods to its customers. Page No 81:Question 6.3:Long answer type questions. What do you mean by Departmental store? Explain the features. Answer:Departmental stores are fixed establishments that are large in size and deal in a wide variety of products. They
generally work with the motto of making everything available to customers under one roof. They comprise various departments for different types of products, such as medicines, clothing and food items. ii. Defined hierarchy: Their management follows the same hierarchy that is generally followed in any joint stock company. That is, the top management consists of a board of directors with the managing director, general manager and department managers under it in that order. iii. Absence of middlemen: They purchase goods directly from manufacturers and sell them to customers. Thus, they eliminate the role of middlemen. iv. Centralised purchase with decentralised sales: In a departmental store, the purchases from manufacturers are handled by a single division that follows a centralised purchase policy. On the other hand, the sales are handled by the respective sections of the departmental store that follow a decentralised policy for sales. v. Shopping convenience: The stores offer a high degree of convenience to the customers by making a large variety of goods available at one place. Thus, the customers do not have to go from one shop to the other to complete their shopping. Page No 81:Question 6.4:Long answer type questions. Explain the role of chamber of Commerce and Industry in internal trade? Answer:Chamber of Commerce and Industry acts as a guardian of trade, commerce and industry in order to protect and promote the common interests and goals. ii. Levies octroi and other local taxes: Octroi and local taxes are charged on goods or from people entering a state or municipal boundaries. These taxes form an important source of revenue for the local government. The chamber also regulates the imposition of such taxes so that they do not adversely affect local trade. iii. Brings together the sales tax and VAT structure of different states: Sales tax and VAT are important sources of revenue for the state government. Chamber of Commerce and Industry ensures that these taxes are uniform across states for maintaining a balance in trade. iv. Development of a sound infrastructure: The development of a sound infrastructure is necessary for the smooth flow of goods. Thus, the Chamber interacts with the government and convinces the government to invest in the development of infrastructure such as roads, highways, ports, railways and electricity. v. Ensures uniform excise duty across states: The central and excise duty is one of the important sources of government revenue. In this regard, the Chamber ensures that the excise duty imposed by the central government is uniform across states. Page No 81:Question 6.5:Long answer type questions. What do you mean by wholesalers? Explain various services given by wholesalers. Answer:Wholesalers are the traders that buy and sell goods in bulk, usually for resale in local markets. They act as a link between the manufacturers and the retailers by purchasing and selling large quantity goods from the producers and then selling them to the retailers. They perform a wide variety of functions and provide various services to the manufacturers as well as the
retailers.
Page No 81:Question 6.6:Long answer type questions. What is the chain distribution? Explain the need of the middlemen in the market. Answer:Chain of distribution or channels of distribution refers to the individuals, institutions and agents who facilitate the process of distribution. Page No 81:Question 6.7:Long answer type questions. What do you mean by retailers? Explain the features of retailers. Answer:A retailer is a person who purchases goods in large quantities from different manufacturers or wholesalers and sells them to the final consumers in relatively smaller amounts. They are said to
be the last middleman in the chain or channel of distribution as they directly provide goods to the ultimate consumers.
They offer after-sales and customer-care services, provide the facility to buy goods on credit and display a wide variety of goods for selection. Page No 81:Question 6.8:Long answer type questions. Explain the features of wholesalers. Answer:A wholesaler is a person who buys goods in large quantities from the manufacturers and sells them in smaller units to industrial units or retail traders. They act as a link between manufacturer and retailers and are not in direct contact with the ultimate consumers. View NCERT Solutions for all chapters of Class 13 Is a merchandiser who buys goods from a manufacturer and then sells them to retailers?A wholesaler is a merchandiser that buys goods from a manufacturer and then sells them to retailers.
Where is merchandise inventory listed on a merchandisers balance sheet?Merchandise inventory is reported as a current asset on a retailer's balance sheet. A current asset is one that will provide an economic benefit during a given accounting period, typically a year.
What are the journal entries required for the sale of merchandise using a perpetual inventory system?In a perpetual system, two journal entries are required when a business makes a sale: one to record the sale and one to record the cost of the sale.
Why would a retail merchandiser offer an incentive for early payment?Purchase discounts provide an incentive for the retailer to pay early on their accounts by offering a reduced rate on the final purchase cost. Receiving payment in a timely manner allows the manufacturer to free up cash for other business opportunities and decreases the risk of nonpayment.
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