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Difficulty: EasyChannels of Distribution

When a manufacturing enterprise distributes goods directly to retail stores rather than going through the traditional multi-tier distribution network, which intermediary is bypassed?

  1. The wholesalerAnswer
  2. B
    The producer
  3. C
    The consumer
  4. D
    The forwarding agent

Answer

The wholesaler is bypassed when goods move directly from the manufacturer to retail stores.
In commercial trade, the conventional channel of distribution follows the sequence: Producer → Wholesaler → Retailer → Consumer. When a manufacturer distributes products directly to retail chain outlets, the wholesale stage is bypassed.

Step-by-Step Solution

1
Identify the standard traditional channel of distribution.
The standard sequence consists of Producer → Wholesaler → Retailer → Consumer.
This establishes the baseline path involving all primary mercantile intermediaries.
2
Compare the given channel with the standard channel.
The modified channel shown in the scenario is Producer → Retailer → Consumer.
By distributing directly to retailers, the step connecting the producer to the wholesaler is omitted.
3
Determine which middleman was removed.
The wholesaler has been eliminated from the channel.
The wholesaler normally sits between the producer and the retailer.

Key Concept

Channels of Distribution - Intermediary Elimination
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Topics

Channels of Distribution

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