Question 1

What type of wholesaler transports a limited line of products directly to customers for immediate inspection and selection?

Accepted Answer

Truck wholesalers specialize in transporting a limited line of products directly to customers for immediate inspection and selection. This method allows customers to view and choose products directly from the truck, making it a convenient option for both the wholesaler and the customer.

Question 2

Lynn Taylor sells Revlon cosmetics on consignment to grocery stores, maintains the display racks, and restocks when necessary. Lynn's job is best described as a

Accepted Answer

Lynn's job fits the description of a rack jobber, as she maintains and restocks display racks of Revlon cosmetics on consignment in grocery stores.

Question 3

Alison lives in a remote area of Montana, where few good roads exist. She runs a small retail store specializing in western attire. Due to her remote location, Alison is most likely to obtain the merchandise for her store from

Accepted Answer

Given the limitation of good roads in her remote area, Alison is likely to rely on mail-order wholesalers who can deliver the merchandise directly to her store. This also eliminates the need for her to travel long distances to physically visit a wholesaler.

Question 4

Laura and Marie own and operate a small restaurant. On a weekly basis, they go to their local Sam's Wholesale Club to purchase the food items and cleaning supplies they need for their business. With the exception of the volume they purchase and the items' intended use, this grocery shopping trip is identical to a weekly trip by their families to a grocery store. Sam's is serving as a ____ wholesaler for these entrepreneurs.

Accepted Answer

Sam's Wholesale Club is serving as a cash-and-carry wholesaler for Laura and Marie. This type of wholesaler typically requires customers to pay in cash or with a credit card and carry out the items themselves, rather than offering delivery or credit terms.

Question 5

____ provide an effective method of selling small items to customers in remote areas that other wholesalers might find unprofitable to serve.

Accepted Answer

Mail-order wholesalers can sell small items to customers in remote areas without the need for physical presence, making it an effective method. It also allows the wholesalers to serve areas that may not be profitable for other wholesalers to serve due to the high cost of physical distribution.

Question 6

Independent intermediaries that represent two or more sellers and usually offer customers complete product lines in a restricted territory are called

Accepted Answer

Manufacturers' agents are independent intermediaries who represent multiple sellers and provide customers with complete product lines. They typically operate in a restricted territory and may offer marketing and other support services to the manufacturers they represent. Commission merchants, selling agents, and truck wholesalers are not necessarily limited to representing multiple sellers or offering complete product lines, while brokers may represent only one party and not necessarily offer complete product lines.

Question 7

Agents and brokers that facilitate and negotiate purchases but do not actually take title to products are also known as

Accepted Answer

The term "functional middlemen" is commonly used to describe agents and brokers who do not take ownership of the products they are facilitating the sale of, but instead simply facilitate and negotiate the purchases on behalf of their clients. The other answer choices either do not accurately describe this type of intermediary or are not commonly used terms in the industry.

Question 8

Karen has been a buyer for Ocean Mist, a large cranberry processor, for several years. Believing that she knows a great deal about cranberries, their growers, and processors, she decides to go into business for herself. Karen wants to assume no risks of spoilage or price fluctuations. She sees herself as simply bringing the growers and processors together. Her new company would be a

Accepted Answer

Karen's new role as the intermediary between growers and processors, without assuming any risk or ownership of the cranberries, reflects the definition of a broker. A sales agent represents a company and takes orders from customers, while a commission merchant takes ownership of the product and sells it for a commission. A sales branch and sales office are typically branches of a larger company that sell their own products.

Question 9

All of the following are types of limited-service merchant wholesalers except

Accepted Answer

Specialty-line wholesalers are not considered limited-service merchant wholesalers; they typically focus on a very narrow range of products but offer deep expertise and extensive services in that area, unlike limited-service wholesalers who offer fewer services.

Question 10

Mark Bradley's company takes orders from its collection of retail customers and arranges the shipment of goods directly from manufacturers or other wholesalers to its customers' businesses. Mark is operating as a

Accepted Answer

Mark Bradley is operating as a drop shipper, as he takes orders from his customers but arranges the shipment of goods directly from manufacturers or other wholesalers to his customers’ businesses.

Question 11

Which of the following wholesalers never take actual possession of the goods?

Accepted Answer

Drop shippers act as intermediaries between a manufacturer or wholesaler and the retailer. They never physically handle or take possession of the goods. Instead, they arrange for the products to be shipped directly from the manufacturer or wholesaler to the retailer.

Question 12

Manufacturers' agents offer products that are both

Accepted Answer

Manufacturers' agents typically represent products that are noncompeting and complementary to each other, allowing them to offer a range of products to potential buyers without conflicts of interest.

Question 13

Merchant wholesalers who specialize in just a few functions and pass others along to other intermediaries or customers are called

Accepted Answer

Limited-service wholesalers focus on specific functions and may delegate others to other intermediaries or customers. The other options refer to wholesalers who specialize in a range of products (general-line wholesalers), specific products (specialty-line wholesalers), or specialized services (wholesale service specialists, specialty-service wholesalers).

Question 14

Fiona is employed by Hallmark Cards, Inc., where her responsibilities include maintaining displays of greeting cards in drugstores and discount stores. Her daily activities include straightening the cards, pulling outdated or slow sellers, and installing new cards. Fiona is called a(n) _____.

Accepted Answer

Rack jobbers are wholesalers who manage inventory and merchandising for retailers by maintaining product displays, restocking, and removing outdated items, similar to Fiona's role.

Question 15

Angela approaches David Hughes, owner of Hughes Auto Parts, to talk about the possibility of adding a new line of products to his store. Angela tells David that the product is a line of high-quality driving sunglasses. She offers to set up the display, service and restock it weekly, and maintain billing and inventory records. She tells David that all she needs is a couple of square feet of space. Angela is in the business of serving retailers as a

Accepted Answer

Angela's offer to set up the display, service and restock it weekly, and maintain billing and inventory records indicates that she is a rack jobber. A rack jobber is a type of specialty-line wholesaler who services and maintains displays on behalf of retailers. Rack jobbers typically provide their own displays from which they sell their products.

Question 16

Because Gem Supply's sales have continued to decline, the jewelry manufacturer has found that the costs associated with maintaining its own five-person sales force are prohibitive. The firm's marketing director begins to look for a small company or individual willing to perform the sales function for Gem Supply in its least productive region, the Far West. The ideal entity would carry complementary but non-competing lines. Such a firm or individual would be classified as a

Accepted Answer

The ideal entity that Gem Supply is looking for to perform the sales function in the Far West region would be a manufacturers' agent. This is because the manufacturers' agent is an independent sales representative who represents one or more manufacturers and sells complementary but non-competing products to retailers or wholesalers. As Gem Supply is looking for an entity that carries complementary but non-competing lines, a manufacturers' agent matches the requirement the closest compared to the other options.

Question 17

What is the primary difference between an agent and a broker?

Accepted Answer

An agent represents a company on a permanent basis, acting on behalf of the company as its representative. In contrast, a broker is typically an independent party employed on a temporary basis to facilitate transactions between buyers and sellers.

Question 18

Greg works with a group of farmers who provide him with a regular supply of a variety of fresh vegetables. He picks up their produce and has a regular route of grocers and restaurants that purchase quantities of the items he has on any given day. Greg's operation is which type of wholesaler?

Accepted Answer

Greg's operation is categorized as a truck wholesaler because he physically picks up the produce from the farmers and delivers them to his customers via a regular route.

Question 19

Drop shippers

Accepted Answer

The answer of Drop shippers
...

Question 20

Andrea owns and operates a small novelty store that sells home décor, gifts, jewelry, and gourmet snacks. Because her business is very small, many wholesalers will not deal with her, so she relies primarily on ____ for the survival of her business.

Accepted Answer

The answer of Andrea owns and operates a small novelty...

Quiz 15: Retailing, Direct Marketing and Wholesaling