Classwork Series and Exercises {Business Studies – JSS2}: Distribution

Business Studies Jss 2

Topic: Distribution I

Contents:

• Meaning of Distribution
• Channels of Distribution

A. Meaning of Distribution

It is the action of sharing something out among a number of recipients. It is the way in which something is shared out among a group or spread over an area. It is the action or process of supplying goods to stores and other businesses that sell to consumers.

Distribution is the process of moving a product that has been produced from the producer to the final consumer. The process of distribution is then called channel of distribution.

B. The Channels of Distribution

The channels of distribution are as follows:

• The producer/ manufacturer
• The wholesalers
• The retailers
• The consumers

1. The Producer/ Manufacturer: A person, company, or country that makes, grows, or supplies goods or commodities for sale. A producer is someone or company that makes goods available for sale.
2. The Wholesaler: The wholesaler is the trader who buys goods in large quantity, he / she buys in bulk from the producer and sell in small quantities to the retailers. The wholesaler is the middleman between the producer and the consumer. The wholesaler can be a company or an individual. They can be referred to as merchants, distributors or dealers. The wholesalers distribute raw materials for the production of consumer goods. The producers’ deals directly with the wholesalers and the wholesalers deal directly with the retailer
3. The Retailer: The retailer is a trader who buys goods from the wholesalers in small quantity and sells to the consumers. The retailer is the last link in the channel of distribution. The retailer stands between the wholesalers and the consumers.
4. The Consumer: The consumer refers to an individual who buys products or services for personal use and not for manufacture or resale as a Consumer. A Consumer is a person who engages in acquiring and using goods and services to satisfy his needs and wants. The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of their effective demand, the producers would lack a key motivation to produce.

Test and Exercise

1. The channel of distribution is (a) process of distribution (b) location of distribution (c) the idea of the business (d) all of the above
2. The last link in the channel of distribution is (a) manufacturer (b) wholesaler (c) retailer (d) consumer
3. Those who buys goods to satisfy their wants are referred to as (a) producers (b) retailers (c) consumers (d) wholesalers
4. The action of sharing something out among a number of recipients is (a) combination (b) distribution (c) continuation (d) malnutrition
5. ———- and ————- is called the middlemen (a) consumer and producers (b) consumer and retailer (c) wholesalers and retailers (d) producers and retailers

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