00:10 Good day students, my name is Mr. Balogun Abdullah, your economics teacher.

00:18 The topic for today is channel of distribution.

00:23 At the end of this lesson, you should be able to do the following.

00:30 Describe the channel of production from the producer to the final consumer.

00:34 State the functions of wholesalers and retailers.

00:39 Explain the role of cooperative societies and governments in production in product distribution.

00:46 Identify the problems of distribution and ways of improvements.

00:55 The channel of distribution is the path through which goods move from the producer or

01:01 manufacturer to the final consumers. It is also referred to as chain of distribution or

01:09 distributive trait. That is, the channel of distribution is the channel through which

01:17 the goods passes from the manufacturer or producer through the wholesalers who are

01:25 who consist of the wholesalers and the retailers down to the final consumers.

01:34 And this is illustrated by the diagram as shown. You can see the manufacturers are at the

01:43 top of it, then next the wholesaler, then the retailer, and the final consumer.

01:50 Process of distribution, what is process of distribution? The process of distribution

02:01 involves all physical and human means which aid the smooth transfer of such goods from the

02:09 manufacturer to the final consumers. The process of distribution involves all physical and

02:18 human means which aid the smooth transfer of such goods from the manufacturer to the final consumers.

02:27 The process of distribution involves the following.

02:34 One, mediummen, and the mediummen comprises the wholesalers and the retailers. Two, transportation.

02:42 Three, advertisement, and four, warehousing.

02:48 The wholesaler. Where is the wholesaler? The wholesaler is a merchant who purchases

02:58 goods in large quantities from the manufacturer and sells in small quantities to the retailers.

03:05 That is, the wholesaler buys goods in bulk directly from the manufacturer or producer

03:12 and he sells them in small quantities to the retailers.

03:17 Functions with the wholesaler performs to the manufacturer.

03:23 The following are the functions which the wholesaler performs to the manufacturer.

03:28 Buck breaking, that is, he purchases goods in large quantities from the manufacturer, thereby

03:37 making it easy for the manufacturer to produce more goods.

03:41 Financing. By buying things from the manufacturer in bulk or in large quantities and paying instantly,

03:53 he makes money available to the manufacturer to go into further production.

03:58 Information dissemination. That is, he passes information from the retailer down to the manufacturer.

04:08 He is a link between the retailer and the manufacturer.

04:14 Warehousing. When he buys goods or products in bulk from manufacturers, he has a store for

04:24 keeping those goods and he gives them out as they are being demanded. That is called warehousing.

04:31 That is, the practice of storing large amounts of goods in a warehouse or in a large store.

04:37 Advertisements. He helps in advertising the products.

04:44 Price stability. He helps in maintaining price stability, especially by his practice of keeping

04:54 goods in the warehouse and only giving them out as demanded by the retailers.

05:00 He helps to maintain price stability. This is because he doesn't allow the goods to be too

05:08 soft to be too much in supply that cannot bring down the prices of such goods or commodities.

05:15 Provision of transport. He provides transport by taking transport to the manufacturer and

05:25 getting those goods and transporting them back to his warehouse. He also even performs this function

05:30 or this rule to the retailer by distributing thanks to the retailers.

05:35 Credit facilities. What this means is that at times he pays in advance so that the manufacturer

05:46 might have enough funds to go into production. Another production then he gets his goods which he had

05:53 already paid for. Risk bearing. Risk bearing. It means by buying the goods from the manufacturer

06:02 in bulk and keeping them in the warehouse he bears risk because if the price falls down

06:09 as at the time those such goods are still in the warehouse he's the one that will be at the risk

06:14 of reduction in prices. Branding and packaging of goods that is he aides the manufacturer in

06:22 branding and packaging the goods. Now functions which the wholesaler performs to the retailer.

06:32 Include the following. Provision of variety of goods that is he makes the he made variety of

06:41 goods to be available for the retailers. Provision of credit facilities. That means that he sells

06:49 goods at times to the retailers without immediate payment from the retailers allowing them to sell

06:56 those goods and pay back later. That is what is meant by provision of credit facilities.

07:01 Advice to the retailer. He advises the retailer that is he gives them experts advice on the

07:10 situation of the markets and the products. He makes goods available in small quantity. This means that

07:20 he allows or he makes it easy for the retailers to be able to buy goods for sale because those

07:27 retailers on their own can't buy goods in large quantity from the manufacturers so the wholesaler

07:34 makes it easy for them to buy a small quantity. Transportation services. Like I said earlier,

07:42 after getting those goods into his warehouse from the manufacturer, he also

07:47 transports them to the retailers to distribute it to his various retail customers.

07:53 Gradient and packaging of goods that is he greets them into different sizes or quantities and

08:02 packages them for the retailers. Price stability. That is it helps to maintain the price of commodities.

08:12 Why? Because as he starts goods in the warehouse, he doesn't make them to be available in too much

08:19 supply. He doesn't make them to be too much and supply. So such as not to just reduce the price

08:25 you know in such a way that with effects he will do the wholesaler himself. So he maintains price

08:32 stability by keeping those goods in the warehouse. Advertising like he is in advertising and advertising

08:41 the goods to the public. Risk bearing. He also bears risk. Why? He bears risk because the

08:50 goods that he has in the warehouse, if the price falls down, he will be the one to be the

08:57 branch of the reduction in the price of the goods and not the retailer because the retailer

09:02 will sell as he buys. Depending on how he buys, he sells. Now he links the retailer and the producers.

09:10 That is he serves as a link, like I said earlier, as a link between the retailer and the producer.

09:16 And in this case, it ensures that there is a smooth flow of information between the retailer

09:22 and the producer. Now the retailer. Who is a retailer? A retailer may be defined as a trader

09:32 who buys goods in small quantities from the wholesalers and sells in beads or units to the final

09:40 consumers. He is one of the middlemen essential in the chain of distribution of goods.

09:46 What this means is that in the chain of distribution or channel of distribution, it is the retailer

09:54 that is the closest to the final consumers because it is from him with the final consumers

10:00 get their goods directly. Times of retail trading. The times of retail trading we have include the

10:08 following. Hawking, mobile shop retailing, street or roadside retailing, market or storeholder

10:17 retailing, small store retailing, chain or multiple stores, department stores, supermarkets,

10:26 mail order, discount houses and variety stores, functions of a retailer. The following are the

10:36 functions of a retailer within the chain of distribution or channel of distribution.

10:41 He sells in small quantities to consumers. He provides after sales services.

10:49 He grants credit facilities to consumers. That is, he sells things and credits to the consumers

10:56 when they don't have money to pay immediately, for payments to be made later.

11:01 He talks variety of goods. That is, it makes a valuable variety of goods to the consumers.

11:08 He supplies information to the whole seller and manufacturer. That is, he gets information about

11:17 the consumers' wish, about the good and their preferences about the products. And he passes

11:23 on the information to the whole seller and the whole seller in turn passes the information to the

11:30 manufacturer. He sells at convenient locations and hours. He gives advice to the consumers.

11:37 The role of cooperatives in distributive trade. That is, the role of cooperative societies

11:48 in the channel of distribution. A cooperative society is defined as a voluntary and business

11:57 organization in which a group of individuals with common interests pull their resources together

12:05 to promote the economic condition and welfare of their members in production, distribution,

12:12 and consumption of goods and services. Again, a cooperative society is defined as a voluntary

12:23 and business organization in which a group of individuals with common interests pull their

12:29 resources together to promote the economic condition and welfare of their members in production,

12:37 distribution, and consumption of goods and services. Cooperative societies and consumers,

12:47 cooperative societies are two major types of cooperative societies.

12:52 The roles of cooperative societies include the following. Stock variety of goods that is,

13:02 the stock variety of goods. They make variety of goods available to their members.

13:10 Sell and small quantities to members. That is, the sell in fees and units to their members.

13:16 The grant credit facilities to members also. That is, some of their members who do not have

13:23 the financial capacity to buy and pay immediately are given goods on credits.

13:28 They give advice to members also as regards the product and services they wish to go into or deal in.

13:39 They also bring products closer to members. They also bring products closer to members.

13:44 The fight holding. Holding is the creation of artificial scarcity by keeping

13:54 goods when they are available and making them scarce, appear as if they are scarce,

13:58 so as to raise the prices of such goods. So they fight holding. They also ensure price stability.

14:08 They eliminate the middlemen. Their intention is to eliminate the middlemen.

14:14 By putting their resources together and giving them self, that's financial capacity to be able

14:20 to go directly to the producers to get goods in large quantities for their members' consumption.

14:27 They also aid in marketing members' products. This last one has to do with producers,

14:34 cooperative societies. That is, in this case, the producers' cooperative societies help in marketing

14:40 the products of their members. The role of government in distributive trade,

14:47 the roles of government in the distribution of commodities include the following.

14:52 Provision of transport system. Provision of storage facilities. That is,

15:00 government are supposed to provide storage facilities so that

15:05 goods that are produced in large quantities and which are perishable can be stored

15:10 and so that they are prevented from spoilage, especially agricultural produces.

15:15 Control of prices. That is, government aids in the control of prices.

15:23 Price stabilization. The government also is in charge of making sure that there is no inflation,

15:31 or inflation is reduced to the bearish minimum.

15:34 Prevention of artificial scarcity. That is, hoarding as stated earlier, under the rules

15:43 of cooperative societies. That is, they prevent artificial scarcity, which is hoarding.

15:49 Importation of essential commodities. The governments are in charge of bringing into the country

15:56 those essential commodities which the country cannot provide or which are in lieu

16:01 supplying in the country. Establishment of communication system.

16:07 Problems of distribution of commodities in Nigeria. The problems of distribution of commodities

16:15 in Nigeria are given as follows. In adequate infrastructure facilities.

16:22 Inadequate storage. Harding and speculation. Packaging problems.

16:31 Inadequate transport system. Long chain of distribution. That is,

16:39 those middlemen involved in the China of distribution are too much. It should be streamlined.

16:47 Insecurity in our roads. Inadequate information. That is, there is poor communication

16:58 down from the final consumer to the producers. So, that is one of the problems inadequate information.

17:06 Add administrative bottlenecks in the collection and handling of goods. That is, in some cases,

17:12 there is too much of paperwork when it comes to the collection and distribution of goods in Nigeria.

17:19 Ways of improving effective distribution of commodities in Nigeria. In other words,

17:28 the problem, the solutions to the problems of distribution of goods in Nigeria.

17:36 The ways by which effective distribution can be improved is given as follows.

17:42 Establishment of more marketplaces. Encouragement of cooperative societies.

17:48 Establishment of a national supply company. Construction of roads to facilitate

17:57 the transportation of goods and services. Provision of storage facilities.

18:05 Reduction in the number of middlemen. Improvement in communication system.

18:11 Now, you take the following question for your self-assessment.

18:17 One, describe the channel of distribution from the producer to the final consumer.

18:24 Two, state-fire function of a wholesaler to the manufacturer.

18:30 Three, state-fire functions of a retailer. Four, state-fire problems of distribution of products

18:38 in Nigeria and their solutions. Now, you take the following question for self-assessment.

18:44 One, describe the channel of distribution from the producer to the final consumer.

18:50 Two, state-fire functions of a wholesaler to the manufacturer.

18:56 Three, state-fire functions of a retailer.

19:00 Four, state-fire problems of distribution of products in Nigeria and their solutions.

19:07 Thank you for watching. My name is Mr. Balogum Abelan. Till the next class.