Commerce involves distributing goods from the producer to the final customer in order to satisfy human wants.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. [1] A provider/maker/manufacturer of goods
2. [1] What people would like to make life more pleasant/comfortable/not necessary/not essential for survival
3. [1] Chain of distribution is part of production
4. [1] It is only when finished products are produced
5. [1] and they can be sold to / bought by consumers
6. [1] delivered to the consumers
7. [1] who use the goods
8. [1] because production is made for consumption
9. [1] that completes the chain of distribution otherwise production will not have taken place
10. [1] as production is made for consumption / to meet consumer demand
11. [1] Providing raw materials
12. [1] home-produced or imported
13. [1] Purchasing in bulk
14. [1] saving manufacturer the costs of dealing with many retailers
15. [1] Clearing production lines
16. [1] do less capital is tied up in stock
17. [1] Enabling manufacturer to produce ahead of demand
18. [1] so mass production can be continued
19. [1] Advice / knowledge of market / customer tastes
20. [1] so keeping manufacturers informed of changes in demand
21. [1] Payment
22. [1] within a reasonable period
23. [1] Storage
24. [1] of goods in warehouse
25. [1] Preparing goods for sale
26. [1] example
27. [1] Reservoir of goods
28. [1] helping to balance out seasonal fluctuations
29. [1] Risk bearing
30. [1] so it is the wholesaler that loses if demand/fashions change
31. [1] Delivery/distribution
32. [1] collecting goods from factories / transporting to their warehouse
33. [1] Breaking of bulk
34. [1] by splitting bulk into smaller saleable quantities
35. [1] Advertising widely
36. [1] makes the goods known / increases demand
37. [1] A credit note is a commercial document used when the customer is overcharged.
38. [1] Trade discount is offered to encourage bulk buying.
39. Many small-scale retailers cannot buy in bulk as they do not have the capital to buy directly from manufacturers.
40. Many small-scale retailers only require small quantities of goods as their turnover is small, and they do not want to waste products if they overbuy. Manufacturers prefer to deal with large-scale retailers making bulk/bigger purchases.
41. Small-scale retailers do not have the resources to buy a variety of goods from different manufacturers who will not deliver to small-scale retailers
42. Wholesalers are located near to small-scale retailers and can supply their needs quickly as they warehouse the goods giving the small-scale retailer choice and providing them with credit.
43. Small-scale retailers do not have large warehousing facilities.
44. Evaluation: Wholesalers are very important to small-scale retailers as they would find it very difficult to survive without the services wholesalers provide because they cannot afford to bulk-buy, transport their own goods or have their own warehouses.