Under what circumstances a wholesaler may be eliminated from the chain of distribution?

Under what circumstances a wholesaler may be eliminated from the chain of distribution?

The wholesaler may be eliminated from the chain of distribution/the services of a wholesaler may not be required under the following circumstances.

  • When manufacturers are financially strong to open up their own retail outlets through which they can serve their customers.
  • When large scale retailers which buys in bulky from the producer exist like supermarkets, institutions among others.
  • When the consumers require direct services of the producer e.g. a patient requires direct services of the doctor.
  • When the producer has his appointed agents in all parts of the country where goods are sold directly to the consumers.
  • When the sale of goods is by contract, the producer will deal directly with the consumer hence no need for a wholesaler.

  • When the goods involved are bulky, delicate, technical and expensive, the producers find it convenient to deal with the consumers.
  • When mail order services exist or if the producer’s business is operated through the post office.
  • When a producer deals in perishable products which requires minimum level of handling. e.g. fish, tomatoes e.t.c.
  •  When the distance between the producer and the consumers is very short, the consumers can buy directly from the producer.
  • When consumer’s co-operatives exist, they can pool enough capital to enable them buy in bulky from producers hence eliminating a wholesaler.
  • When the producer can afford to break the bulky by selling in small quantities to the consumers.

  • When the producer owns mobile vans which can enable him distribute his products efficiently to the consumers.
  •  When the producer can afford warehousing facilities for the goods which he produces in bulky.

When the demand for the goods is seasonal, the wholesalers may not be desired.


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