Question 1

Some wholesalers have higher operating costs because of the strategies they select, including the special services they offer to some customers.

Accepted Answer

Wholesalers may offer special services such as customized packaging or faster delivery to some customers, which can increase their operating costs.

Question 2

One reason manufacturers' sales branches handle over 25 percent of wholesale sales is that they are located in the best market areas.

Accepted Answer

Manufacturers' sales branches are strategically located in prime market areas to ensure better access to significant customer bases, leading to their handling of over 25 percent of wholesale sales.

Question 3

Despite the functions they provide, the number of wholesalers in the United States has decreased 16 percent in the last 15 years.

Accepted Answer

According to a report by IBISWorld, the number of wholesalers in the United States has decreased by 16.3% from 2006 to 2021 due to factors such as increasing competition from online retailers and manufacturers selling directly to consumers.

Question 4

When considering cost as a percent of sales, agent wholesalers are more expensive than manufacturers' sales branches.

Accepted Answer

Agent wholesalers do not take title to goods and typically operate on a commission basis, making them generally less expensive than manufacturers' sales branches, which involve the costs of holding inventory, facilities, and a larger sales staff.

Question 5

The supercenter retailing format began in the U.S. and then was exported to other countries.

Accepted Answer

The answer of The supercenter retailing format began in the...

Question 6

Although wholesalers no longer dominate channels in the U.S., they do provide a necessary function and some of the biggest B2B e-commerce sites on the Internet are wholesaler operations.

Accepted Answer

Wholesalers still play an important role in the supply chain, and many of the top B2B e-commerce sites are operated by wholesalers.

Question 7

Manufacturers' sales branches are warehouses that producers set up at separate locations away from their factories.

Accepted Answer

Manufacturers' sales branches are established to improve customer service and to save transportation costs. They are separate warehouses from the factories where manufacturers keep their finished products before they are sold to distributors or retailers.

Question 8

Wholesalers are adapting their marketing strategies and changes are under way even though they may be invisible to consumers.

Accepted Answer

The statement suggests that wholesalers are making changes to their marketing strategies, but these changes may not be noticeable to consumers.

Question 9

According to the U.S. Census Bureau, wholesaling is defined as the activities of firms that sell to retailers, but do not sell in large amounts to final consumers, manufacturers, or other institutional users.

Accepted Answer

The U.S. Census Bureau defines wholesaling as activities of firms that sell goods to retailers, other wholesalers, or industrial, institutional, and commercial users, but not typically to final consumers.

Question 10

Franchising now accounts for about a third of all retail sales.

Accepted Answer

According to a 2020 study by the International Franchise Association, franchising now accounts for approximately 33% of all retail sales in the United States.

Question 11

Wholesalers are more likely to dominate distribution channels in more advanced economies than in less-developed ones.

Accepted Answer

In less-developed economies, wholesalers often play a more dominant role in distribution channels due to less developed retail infrastructure and the need for intermediaries to bridge the gap between manufacturers and a fragmented retail sector.

Question 12

Consumers in less-developed nations have the income to support mass distribution.

Accepted Answer

Consumers in less-developed nations generally have lower income levels, which may not be sufficient to support mass distribution.

Question 13

Merchant wholesalers account for over 60 percent of all wholesale sales.

Accepted Answer

According to the U.S. Census Bureau, merchant wholesalers account for approximately 62 percent of all wholesale sales in the United States.

Question 14

Progressive wholesalers are becoming more concerned with their customers and with adding value in their channels.

Accepted Answer

Progressive wholesalers are indeed becoming more customer-focused and are adding value in their channels to create better customer experiences and strengthen relationships. This trend is driven by evolving customer expectations and the need to stay competitive in the market.

Question 15

Agent wholesalers usually have higher operating expenses (as a percentage of sales) than merchant wholesalers.

Accepted Answer

Agent wholesalers typically have lower operating expenses as a percentage of sales compared to merchant wholesalers because they do not take title to the goods and usually have less involvement in the physical handling of products, reducing their operational costs.

Question 16

In-store shopping varies a lot from country to country, but online shopping does not.

Accepted Answer

Even though online shopping has become a global phenomenon, it still varies based on factors such as language, payment methods, shipping options, and product availability. These differences can affect the user experience and make online shopping different from country to country.

Question 17

Manufacturers usually operate sales branches in areas where sales potential is very low-because intermediaries are not interested in serving such markets.

Accepted Answer

Manufacturers usually operate sales branches in areas where sales potential is high and intermediaries are interested in serving such markets.

Question 18

"Merchant wholesalers"-who take title to the products they sell-are the most common type of wholesaling establishment.

Accepted Answer

Merchant wholesalers are the most common type of wholesaling establishment and they take title to the products they sell.

Question 19

Manufacturers' sales branches operate like wholesalers, but the U.S. Census Bureau does not consider them wholesaling establishments because they do not involve a separate warehouse.

Accepted Answer

Manufacturers' sales branches are considered to be part of manufacturing establishments rather than wholesaling establishments because they do not involve a separate warehouse, and they typically operate as an extension of the manufacturing process.

Question 20

Merchant wholesalers account for almost 85 percent of all wholesalers.

Accepted Answer

According to the U.S. Census Bureau, merchant wholesalers make up 84.6 percent of all wholesalers.

Quiz 12: Retailers, Wholesalers, and Their Strategy Planning