Mada za sehemu hiiTradeMada 5
- Concept of trade
- Characteristics of trade
- Channels of distribution
- Middlemen or intermediaries in the distribution
- Functions/roles/advantages of a channel of distribution
They are traders who operate between producers and final consumers as they are involved in the whole distribution process.
Are persons or firms who put producers in touch with consumer.
Middlemen is classified into merchant middlemen and mercantile agents.
- Merchant middlemen: These are middlemen who buy and sell goods in their own name (they own the properties). They include wholesalers and retailers.
- Mercantile agents: These are middlemen who hold and sell the goods on behalf of other people called principals. They sell goods which are not theirs, they belong to principals, so they act on principal's name.
| Merchant middlemen | Mercantile agents |
|---|---|
| Take title to goods | Do not take title to goods |
| Assume the risks of marketing | Do not assume any risks in the marketing of goods |
| They operate for profit | They operate for consideration at a certain percentage or a fixed amount of commission |
| They act on their own name or account | Act on behalf of their principals |
- They do not take title to the goods.
- They are paid commission based on sales or purchases.
- They are used as marketing force by principals.
- They serve the interest of both buyers and sellers.
- They facilitate smooth flow of goods from the manufacturer to final user.
- They offer specialized or expert in marketing, hence relieve manufacturers of tasks outside their scope and concentrate in producing tasks.
- They are near customers, so they know their demand and satisfy them.
- Many manufacturers want to avoid risks which would face them if they had to sell directly to consumers, e.g., theft, damage, etc.
- It is impossible for manufacturer to have stores all over the country. Therefore, middlemen are important because they are scattered all over the country and they can offer storage facilities in all regions.
- Many manufacturers do not have financial resources to sell directly to consumers, e.g., transport cost.
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