DISTRIBUTIVE TRADE
The term distributive trade refers to the various stages that finished products passes before reaching the
final consumer. Distributive trade plays a very important role in a country's economic development as it
ensures that goods reach their destination in the shortest possible time and are still of good quality.
PROCESSES OF DISTRIBUTION
This refers to a series of activities which takes place between the time of production of goods and the
goods get to the consumer. Such activities include; purchasing, assembling, inventory management,
transportation,deport servicing, advertisement, insurance, marketing etc
CHANNEL OF DISTRIBUTION
Goods normally pass from the hands of the manufacturer or producer through a number of middlemen
before it reaches the consumer. The channel of distribution is also called the chain of distribution. It can
be outlined as follows
Manufacturer/ producer
Wholesalers
Retailers
Consumer
The producer is the person or organization that transforms or converts raw materials into finished or
semi- finished goods for consumers' satisfaction. He combines the factors of production to produce
goods and services. He is the one who creates utility.
The Wholesaler
The Wholesaler is the middlemen between the producer and the retailers, he buys goods in bulk from
producers and sells to retailers
Functions of Wholesaler to the Manufacturer
1. He buys in bulk from the producer or manufacturer
2. He breaks the bull for the retailers
3. He finances producers
4. The Wholesaler finances retailers by giving them credit facilities
5. He provides warehousing or storage facilities for goods. I.e he acts as a store keeper for both
producers and retailers
6. The Wholesaler helps to make the prices of goods stable
7. Wholesalers help to create markets for producers and themselves through large scale advertising
8. The Wholesaler gives vital information about market situations to the producer.
Functions of the Wholesaler to the Retailer
1. The Wholesaler advises or educates the retailer on the use of products especially if it's a new
producer
2. He gives credit facilities to the Retailer by allowing them to pay at a later date
3. He sells goods to the Retailer in quantities they require
4. He introduces new products to the Retailer
5. He offers variety of products to the Retailer to choose from
6. The Wholesaler at times relieve the Retailer by providing transportation services for them
The Retailer
The Retailer is the last link in the chain of distribution. He buys in small quantities from the wholesaler
and sells in bit or units to the consumer.
Functions of the Retailer
1. The Retailer takes goods to the most convenient place for the consumer to get them.
2. He provides after sales services to the consumer
3. He communicate market demand to the manufacturer through the wholesaler
4. He provides credit facilities to the consumers by allowing them to pay at later date
5. He stocks and sells a wide of variety of products to the consumer
6. He serves as a link between the Wholesaler and the final consumer
Retail trade could be carried out in any of the following methods; Hawking, market place
retailing,street retailing,small stores, kiosks,departmental stores, multiple shops, supermarkets,hyper
markets etc
ROLES OF COOPERATIVE SOCIETY IN DISTRIBUTIVE TRADE
Some co-operative societies act as retailers in the distribution of goods and services such cooperative
societies buy goods in bulk from wholesaler and manufacturer and sell to their members at moderate
prices. They also perform the following functions in the distribution of goods
1. They sell essential goods at affordable prices
2. They offer credit facilities to consumers
3. They help in preventing hoarding
4. They help in controlling inflation by selling to consumers at lesser prices
5. They help in completing the process of distribution by making goods available to consumers
ROLES OF GOVERNMENT AGENCIES IN DISTRIBUTIVE TRADE
In order to remove some of the problems associated with distribution ,the government sometimes set
up some distributive agencies, these agents are usually set up with the responsibility of producing goods
and distributing them to the masses through some basic channel.
These agencies carry out their activities through;
a. Appointed distributors
b. Sales outlet to sell directly to the public
c. Cooperative societies
d. Private firms interested in distribution
Most of these government agencies failed in carrying out their responsibilities for the following
reasons
1. The government Subsidizes prices in order to sell at moderate prices
2. Inability to keep up with the subsidy which usually leads to selling at the same rate with the open
market
3. Corruption of officials who saw the agency as a means to enrich themselves.
PROBLEMS OF DISTRIBUTION AND MARKETING OF COMMODITIES IN NIGERIA
1. Poor transportation network
2. Inadequate credit facilities
3. Inadequate storage or warehousing facilities
4. Hoarding
5. Inadequate infrastructural facilities
6. Insecurities on Nigerian roads
7. Long chain of distribution
8. Packing problems
ASSIGNMENT
Suggest at least 8 Solutions to the problems of distribution in Nigeria
