‘Generally consumers prefer to buy goods directly from the producers but it is not always possible.’ Give reasons, why is it so by explaining four different factors responsible for this.
Generally consumers prefer to buy goods directly from the producers but it is not always possible. Instead of it, consumers are supposed to take the help of channel of distribution, i.e., middleman. In this channel, mainly agents, wholesalers and retailers are included. Following reasons are possible for this situation:
(i) Geographical Difference: There are limited number of producers of any product while consumers are unlimited and scattered over a wide geographical areas. Hence, it is not possible to buy directly from the producers.
(ii) More Risk: At the time of transporting of goods from one place to another, element of risk is always there. By using channel of distribution such type of risk can be avoided.
(iii) Heavy Buying Costs: It is a costly and difficult task to contact directly to the producers.
(iv) Unavailability of Credit Facility: Generally, it is not possible to have credit facility while purchasing directly from the producers.
