Question 1

Cash-and-carry wholesalers are more common in underdeveloped nations than in the U.S.-where big warehouse clubs have taken much of the business.

Accepted Answer

Cash-and-carry wholesalers are more prevalent in underdeveloped countries due to the lower penetration of big warehouse clubs. In the United States, big warehouse clubs have taken over much of the cash-and-carry business.

Question 2

Service wholesalers may be general-merchandise, single-line, or specialty wholesalers.

Accepted Answer

Service wholesalers can specialize in a variety of products, including general merchandise, single-line products, or specific specialties. Therefore, the statement is true.

Question 3

Limited-function wholesalers provide all of the basic wholesaling functions, except that they do not take title to the products they sell.

Accepted Answer

Limited-function wholesalers specialize in performing only a few wholesaling functions and may or may not take title to the goods, but their defining characteristic is not about taking title, rather it's about offering fewer services.

Question 4

In Japan, products are often bought and sold by a series of merchant wholesalers on their way to the business user or retailer.

Accepted Answer

In Japan, the distribution system usually involves multiple layers of wholesalers between producers and retailers. This is known as the keiretsu system.

Question 5

Of all service wholesalers, specialty wholesalers carry the narrowest range of products and offer the most service.

Accepted Answer

Specialty wholesalers focus on a specific product or product category, which means they carry a narrow range of products. They also provide more personalized and customized services to meet the unique needs of their clients.

Question 6

Cash-and-carry wholesalers are limited-function wholesalers who do not grant credit, but otherwise operate like service wholesalers.

Accepted Answer

Cash-and-carry wholesalers require their customers to pay in cash or with a credit card at the time of purchase, and they typically do not offer delivery or other services associated with full-service wholesalers. However, they may offer discounts and typically have a wide selection of products available for immediate purchase.

Question 7

Drop-shippers keep adequate quantities of every product they carry in their own warehouses so that they can ship them out quickly.

Accepted Answer

Drop-shippers do not keep adequate quantities of every product they carry in their own warehouses. Instead, they rely on third-party suppliers to store and ship products directly to customers.

Question 8

General merchandise wholesalers handle a wide variety of nonperishable items-and usually serve many different kinds of retail stores.

Accepted Answer

General merchandise wholesalers deal with a wide range of non-perishable goods and cater to various retail stores.

Question 9

Specialty wholesalers usually sell a very narrow range of products and compete with other wholesalers who have a broader range of products by offering expert technical help and/or service to their customers.

Accepted Answer

Specialty wholesalers typically focus on a specific product or product category, allowing them to develop expertise in that area and offer specialized technical assistance or service to their customers as a competitive advantage.

Question 10

Agent wholesalers typically provide even more functions than full service merchant wholesalers.

Accepted Answer

Full-service merchant wholesalers provide a wider range of services, including stocking inventory, extending credit, product delivery, and marketing support, compared to agent wholesalers who primarily facilitate sales between buyers and sellers without taking title to the goods.

Question 11

Agent wholesalers operate at relatively low cost-sometimes 2 to 6 percent of their selling price.

Accepted Answer

Agent wholesalers operate at relatively low cost, typically ranging from 2 to 6 percent of their selling price. This is because they do not typically own the products they sell and instead act as intermediaries between manufacturers and retailers or other buyers.

Question 12

Catalog wholesalers usually sell to business customers who don't have a local wholesaler or otherwise are not called on by other wholesalers.

Accepted Answer

Catalog wholesalers often serve as a source for businesses that are not serviced by other wholesalers or do not have a local wholesaler available to them.

Question 13

Limited-function wholesalers provide only some of the wholesaling functions.

Accepted Answer

Limited-function wholesalers may specialize in certain functions such as transportation, warehousing, or selling to retailers, but do not provide a full range of wholesaling services.

Question 14

Agent wholesalers do not own the products they sell, but they usually perform even more functions than a service wholesaler.

Accepted Answer

The answer of Agent wholesalers do not own the products...

Question 15

Drop-shippers have low operating costs because they do not actually handle the products they sell.

Accepted Answer

Drop-shippers only act as the middlemen between the manufacturer and the customer. They do not need to physically handle the products or maintain inventory, which results in lower operating costs.

Question 16

In consumer products, single-line wholesalers serve single-line and limited-line retail stores.

Accepted Answer

Single-line wholesalers specialize in one product category and typically supply retailers that also specialize in that same product category, such as a wholesaler of electronics supplying a store that only sells electronics. Limited-line retailers may carry a small variety of related items within their specialized category, such as a store that sells only cameras also carrying camera accessories.

Question 17

A retailer that buys from a rack jobber needs to have an employee who is a specialist in the products the rack jobber handles.

Accepted Answer

Rack jobbers typically manage everything from stocking to merchandising their products in the retailer's space, so the retailer does not need a specialist for the products.

Question 18

In the U.S., big warehouse clubs have taken much of the cash-and-carry wholesalers business.

Accepted Answer

Big warehouse clubs like Costco and Sam's Club have captured a significant portion of the cash-and-carry wholesalers business in the U.S. over the years.

Question 19

Truck wholesalers may provide almost the same services as full service wholesalers, but they usually specialize in perishable products that regular wholesalers prefer not to carry.

Accepted Answer

Truck wholesalers often specialize in perishable products such as fruits, vegetables, dairy, and meat products, which may require specialized storage and transportation. Regular wholesalers may not want to take on the added costs and risks associated with handling these products, so truck wholesalers can fill the gap in the market by providing specialized services for perishables. However, truck wholesalers may also offer other products and services beyond perishables, depending on their business model.

Question 20

A hardware wholesaler that buys nails from a manufacturer and then sells them to retail hardware stores is a merchant wholesaler.

Accepted Answer

This statement is true. A merchant wholesaler is defined as a business that buys goods in large quantities from manufacturers and then sells them to retailers. In this case, the hardware wholesaler is buying nails from a manufacturer and selling them to retail hardware stores, making them a merchant wholesaler.

Quiz 12: Retailers, Wholesalers, and Their Strategy Planning