WAEC Commerce 2016 Theory — Question 3

Model answer

(a) Functions of a wholesaler to a retailer: - By providing credit facility: if a wholesaler is intending to give a retailer some credit, such will assist the retailer from going out of stock. - Assisting the retailer to deliver its goods as at and when due at its doorstep. - Updating the retailer about changes in the prices of goods so as to know how to dispose the goods in its disposal. - Offering discount to the retailer in order to be able to make profit from the goods bought. The discount can be both cash and trade discount. - Also, the wholesaler can provide store or help in financing the store. This will ease the burden of the retailer and thus, will be able to load more goods in the store. (b) Advantages of small-scale business over large scale business: - Small scale businesses are flexible to manage and change objectives - Small scale requires little capital to start-up and to boost up - Small scale business does not require high skill to manage - It does not require all sort of registration and documentation - There is personal touch between the buyer and sellers compared with a large scale which is strict formal. Thus, customers tend to show more loyalty to small scale.