Wholesale and Retail Trade MCQ Quiz - Objective Question with Answer for Wholesale and Retail Trade - Download Free PDF

The Correct answer is Option 4.

Key Points

• B2B (Business-to-Business): This involves transactions between businesses, such as a manufacturer selling products to a wholesaler or retailer.
• B2C (Business-to-Consumer): This focuses on transactions between businesses and individual consumers, like buying clothes or electronics online.
• C2B (Consumer-to-Business): In this model, individual consumers offer products or services to businesses, such as freelance services or influencer partnerships.
• Hence Option 4 is correct. 

The correct answer is: (A) - (III), (B) - (IV), (C) - (II), (D) - (I)

Key Points

• Specialty store (A - III)
  • A specialty store is characterized by carrying a narrow product line with a deep assortment. For example, a store specializing in shoes or electronics.
  • These stores focus on a specific category, providing expertise and a wide variety of choices within that category.
• Convenience store (B - IV)
  • A convenience store is a relatively small store located near residential areas. Examples include 7-Eleven or local corner shops.
  • These stores typically offer a range of everyday items such as snacks, drinks, and basic groceries, making them convenient for quick and easy access.
• Supermarket (C - II)
  • A supermarket is a large, low-cost, low-margin, high-volume, self-service operation designed to serve the consumer's total needs for grocery and household products. Examples include Walmart and Tesco.
  • Supermarkets provide a wide variety of food and household items, usually organized into sections or aisles.
• Department store (D - I)
  • A department store carries several product lines, typically including clothing, home furnishings, and household goods. Examples include Macy's and John Lewis.
  • These stores are often organized into different departments, each specializing in a particular type of product.

Additional Information

• Retailer Types
  • Different types of retailers cater to various consumer needs and shopping preferences.
  • Specialty stores focus on specific product categories, offering deep assortments and expertise.
  • Convenience stores provide quick access to everyday items, often with extended hours and close proximity to residential areas.
  • Supermarkets offer a wide range of grocery and household products at competitive prices in a self-service format.
  • Department stores offer a broad selection of merchandise across multiple categories, typically in larger, multi-level stores.

The correct answer is 'Factory outlet.'

Key Points

• Factory outlet:
  • A factory outlet is a type of off-price retailer that sells products directly from the manufacturer at a discount.
  • These outlets typically offer excess production, discontinued items, or products with minor defects at lower prices.
  • Factory outlets are often located in outlet malls and are popular with consumers looking for brand-name goods at reduced prices.

Additional Information

• Super store:
  • A super store is a large retail store that combines a grocery supermarket with a department store, offering a wide range of products under one roof.
  • They are not categorized as off-price retailers because they sell products at regular prices rather than discounted rates.
• Category killer:
  • A category killer is a large retail chain that specializes in a particular product category and offers a vast selection at competitive prices.
  • Examples include stores like Best Buy (electronics) or Home Depot (home improvement). They are not off-price retailers, as they focus on dominating a specific product category rather than offering discounted merchandise.
• Discount store:
  • A discount store sells a wide variety of goods at lower prices compared to traditional retail stores.
  • While they do offer products at reduced prices, they are not the same as factory outlets, which specifically sell manufacturer-direct goods at discounts.

• A pure wholesaler is a merchant who operates by buying and selling goods in large lots without engaging in the manufacturing or retailing of those goods. Their primary role is to act as intermediaries between producers and retailers or other businesses, facilitating the distribution process.
• Pure wholesalers handle large quantities of products, securing bulk purchases from manufacturers and reselling them in smaller quantities to retailers, other wholesalers, or industrial users.

• Rationale: This option refers to a wholesaler who is also involved in the manufacturing of the products they distribute. Therefore, it doesn't fit the definition of a merchant who operates solely by buying and selling goods without engaging in manufacturing.

• Rationale: This term suggests a wholesaler who is also involved in retailing activities, directly selling products to consumers. This does not align with the definition of a pure wholesaler, who does not engage in retailing.

• Rationale: This option is incorrect because "Pure wholesaler" is the accurate term that describes a merchant who buys and sells in large lots without manufacturing or retailing.

• Pure wholesalers play a crucial role in the supply chain by ensuring that products are efficiently moved from manufacturers to retailers. They often take on the risk of holding inventory and provide services such as bulk breaking, warehousing, and transportation.
• By focusing solely on wholesaling, pure wholesalers contribute to cost efficiencies and help streamline the distribution process.

• Among the provided options, "Pure wholesaler" correctly identifies a merchant who operates entirely by buying and selling goods in large lots, without engaging in manufacturing or retailing.

Key Points 

• Departmental stores is a large establishment that offers various products which are classified into different departments such as medicines, groceries, electronics, cosmetics within a store.
• Departmental stores are located at a central place which attracts a large number of customers leading to a large turnover. The prominent location of the store results in increased sales due to the increased visibility and easy accessibility of the store to a large number of consumers.
• These stores can spend resources on advertising and promotional activities through press, radio and television. The effective advertising attracts the customers and leads to an increased sales.
• Bulk buying from the manufacturers enables them to obtain heavy discounts. By buying the goods in large quantities from the manufacturers, departmental stores are able to avail better discounts or rebates, thus enabling them to take the advantage the economies of scale.

Additional Information 

• Departmental stores combines the functions of retailing as well as warehousing.
• Departmental stores have centralised purchasing procedures.
• They offer other services which include home delivery of goods, credit facility, telephone booths etc.
• These stores have high operational cost and require huge investment for set up.

The correct answer is D2D (Distributor-to-Distributor).Key Points

• B2C (Business-to-Consumer):
  • Business-to-consumer marketing describes the practice of companies selling goods and services directly to customers without the use of a middleman.
  • B2C mainly refers to online merchants who use the internet to sell goods and services to customers.
• C2C (Consumer-to-Consumer):
  • A business model known as "consumer to consumer" (C2C) allows for private customers to deal for goods or services without the involvement of a business on either end of the transaction.
  • Today, online businesses handle the majority of C2C transactions.
• B2B (Business-to-Business):
  • Business-to-business (B2B) refers to a deal or transaction made between two companies, like a wholesaler and a retailer.
  • B2B transactions typically take place in the supply chain, where one business buys raw materials from another in order to utilise them in the production process.
  • Companies in the auto business, as well as those in property management, housekeeping, and industrial cleanup, frequently engage in B2B transactions.

Additional Information

• E-commerce is the electronic purchase or sale of goods through online stores or the Internet.
• E-commerce makes use of technology like supply chain management, mobile commerce, electronic payments transfer, Internet marketing, etc.
• Online retail, electronic markets, and online auctions are the three subfields of e-commerce.
• Electronic business provides a foundation for e-commerce.
• There are five essential categories of E-commerce:
  • Business to Business
  • Business to Consumer
  • Business to Government
  • Consumer to Business
  • Consumer to Consumer

The correct answer is Wholesaler.

Key Points

• Wholesalers 
  • They buy goods in large quantities from the manufacturers and sell them in smaller units to industrial units and/or retail traders. Hence, Option 2 is correct.
  • The wholesaler buys goods on a large scale to sell them at a profit in smaller quantities.
  • He buys from the producers that are the extractor or manufacturer and sell to the retailers and are, therefore, the connecting link between these two.

Additional Information 

The logic is the process of the production of an item.

2. Manufacturer

4. Wholesaler

3. Retailer

5. Customer

1. Consumption

Hence, "2, 4, 3, 5, 1" is the correct answer.

Key Points

Retail Store:

Any establishment, whether for profit or not, that sells goods to customers directly includes "retail stores," as do "restaurants," "pharmacies," "convenience and grocery stores," "liquor stores," and "seasonal and temporary companies."

Important Points

The most significant category of retailers is:

• A convenience shop is located near a residential area. It is fairly compact. Long hours are spent keeping it open. Convenience items are available for purchase in a few different lines. The costs are marginally greater.
• A department store is a sizable retail establishment that carries many different product lines. For the goals of purchasing, promoting, providing services, and maintaining control, it is divided into distinct divisions and offers a large selection in each line. It is sometimes referred to as a department store for mass merchandise, such as military canteens.
• Superstores are large-scale retail establishments with a wide range of product categories. These satisfy all of a customer's regular food and non-food demands. Malls do not contain these retail establishments. Instead, they stand alone as malls.

Thus, the correct answers are A, C and E only.

Additional InformationOther major types of store retailers are:

• Specialty Store
• Drug Store
• Discount Store
• Extreme Value or Hard-discount Store
• Off-Price Retailer
• Catalog showroom

Calculation:

A retailer buys 20 pens for Rs. 40.

So, the cost price of 1 pen = 40/20 = Rs. 2

A retailer sells the pens at the rate of Rs. 40 for 15 pens.

So, the selling price of 1 pen = 40/15 = Rs. 8/3

Profit percent = [(Selling Price - Cost Price)/Cost Price] × 100

Profit percent = [(8/3 - 2)/2] × 100

Profit percent = (2/6) × 100

Profit percent = 100/3 = 33%

So, the profit margin is 33%.

Hence, option 3 is correct.

The correct answer is Manufacturer.

Key Points

• The manufacturer's job is to produce goods that would be consumed by the consumers.
  • They can sell their products directly to customers or to middlemen.
  • Since they are the ones who are making the products, they cannot be a 'reseller' since there is nothing to "re"-sell.

Important Points

• A supply chain typically features various middlemen between the manufacturer and the consumer.
  • The most common in the supply chain are distributors, wholesalers, and retailers. 
• A middleman plays the role of an intermediary in a distribution or transaction chain that facilitates interaction between the involved parties.
  • They enable manufacturers to concentrate on the primary function of production by handling the ancillary functions of warehousing, distribution, advertising, insurance, etc.
• A distributor works closely with a manufacturer in order to sell more goods and gain better visibility on these goods. They sell the products to wholesalers and sometimes directly to retailers when requested.
• Wholesalers: They are the people who buy in bulk from the producers or distributors and sell in small quantities to the retailers.
• Retailers: They are the people who buy in small quantities from the wholesalers and sell to the ultimate consumers.

Given :

Cost price to the retailer is 1000 rupees 

He first increased price by 30% and then gives discount of 15% 

Calculations :

Price after 30% increment = 1000 + 30% of 1000 

⇒ 1000 + 300 = 1300 rupees 

Now price he provides discount at this price so,

Price after 15% discount on increased price = 1300 - 15% of 1300 

⇒ 1300 - 195 

⇒ 1105 rupees 

∴ final selling price will be 1105 rupees 

Retail Supply Chain Management

All the processes that you utilize to ensure your products reach the customers, starting from obtaining the raw materials, managing inbound materials & production processes to last-mile delivery of those products at your customer’s doorstep, are together known as a retail supply chain.

Players in the supply chain

The correct answer is to Make the customer’s problem the retailer’s problem.

Key Points

Creating a good rapport with the customers is very important for maintaining a healthy relationship with the customers. We try to see the most suitable option for the question above:

1. Keep the priority of profit while dealing with the customer- It is not a suitable part to keep the priority of profit while dealing with the customers. If the retailer will keep the profit as a priority then it will only see the customer from the point of view of the business. Treating the customer's needs should always be a priority for any organization. This helps in creating a "pro-customer" environment.
2. See the problem from the point of view of business- Seeing any problem from the point of business will never be able to support a customer. It is important to keep customers' needs and expectations as the key. Customer is the king should be the policy that should be followed.
3. Making the customer's problem the retailer's problem-  This is the key for any organization, only if the firms treat the customer's problem as their own will they be able to solve the problem from the frontline. It shows how the firm values its customers and the satisfaction of their needs as a priority for them. Treating customers in such a manner helps in the betterment of the goodwill of the firm also.
4. Keep the customer stand corrected when he/she makes bad choices- This is not a great idea to create a good rapport with the customers. Making choices are the right of the customers, to correct them will never serve the purpose of creating a strong customer base.

The correct answer is Personalisation of goods or services

Key PointsFollowing are the customer expectations:

Price

• A good way to maintain the constant demands to match the lower prices is to offer a level of service that customers can’t get elsewhere.
• This can include supplying exclusive goods, extraordinary satisfaction guarantees, and friction-free return policies.
• If price matching is still the only option, it is important to balance these losses with products that generate enough profit to cover them.

Stock

• Customers expect items to be well stocked in the store.
• Largely, modern inventory systems and streamlined logistics are able to control and fix stock issues when they arise.

Mobile Commerce

• Savvy retailers are creating mobile optimized shopping experiences that are able to deliver on their brand’s promises.
• Customers expect the same high-quality service that they get on a website, or in the store, on their mobile devices.

Community

• Customers are looking for social connections while they are shopping.
• From peer reviews to chatting with friends on the latest styles and trends, today’s shoppers are tapping into their friends and virtual communities for help in navigating product offerings.

Experiences, not "things"

• People, especially Millennials, want to buy experiences, not “things.”
• They want their money to be spent on a life well-lived, and digital has a big place in their lives.
• Digital experiences add new layers to the ways these millennials experience the retail world.
• Even the smallest of experiences can connect to customers on an emotional level to tell a powerful story.

Speed

• Lastly, we want to touch on a very significant undercurrent of customer expectation in retail: speed.