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Arguments For Elimination Of Wholesalers

Some of the important arguments for elimination of wholesalers are as follows:

1. Increase in Price

Wholesalers are responsible for increase in prices of goods. In the excuse of providing services, wholesalers collect large amount of commission and also take additional price for earning a lot of profit. As they invest in transportation, warehousing, storing, insurance, credit facility, etc. they fix sufficient margin of profit to cover their investment. This increases price of the goods.

2. High Profit Without Risk Bearing

Wholesalers earn much profit compared to the risk they bear. Different industries have to bear various kind of risks, for instance strikes, lock-up, trade depression, changes in fashion, and style etc. Wholesalers do not bear the risks of the loss caused by these factors. Instead, they try to earn more profit using such situations as opportunities. In  this way, wholesalers get more benefit or profit without bearing any risk.

3. Advertisement Of Unnecessary Goods

Mostly, wholesalers make publicity and advertisement if different kinds of goods with the intention to earn profit. They create demand for the goods in society. This cannot be beneficial to society. On the other, they do not take interest to deal in different new or useful products yielding less profit.

4. Black Marketing

Wholesalers encourage black marketing. They keep stock of goods with the intention of earning more profit. They obstruct continuous flow of goods, due to which they become able to earn much profit through immoral means.

5. Rise Of New Trend

Different new trends are developing in marketing. As a result, the producers have become able to sell their products directly to the consumers. In such situation, it is not necessary to depend on the unnecessary middlemen like wholesalers. So, the wholesalers should be eliminated.

In this way, the arguments that the wholesalers should be eliminated from the channel of distribution can be presented.

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