Entrepreneurship and Small Business (ESB) Certification Practice Exam

A wholesaler typically purchases products from which source?

1. Retailers

2. Consumers

3. Manufacturers

4. Distributors

The correct answer is: Manufacturers

A wholesaler typically purchases products directly from manufacturers. This relationship allows wholesalers to buy goods in bulk at a reduced price, which they then sell to retailers or other businesses, acting as an intermediary in the supply chain. By sourcing products from manufacturers, wholesalers can ensure they have a diverse range of goods to offer their clients and can take advantage of lower pricing structures that come from bulk purchasing. Purchasing from manufacturers also means that wholesalers can provide support to those manufacturers by pushing their products into various markets. This arrangement enhances the efficiency of distribution, as manufacturers may not have the capacity or desire to sell directly to every retailer or consumer. While distributors do somewhat overlap with wholesalers as intermediaries, they may have different roles or operate under specific arrangements or specializations, such as managing a specific category of products. Retailers and consumers do not typically act as sources for wholesalers, as they are at different points in the supply chain. Therefore, the most appropriate source for wholesalers is indeed manufacturers.