Future Business Leaders of America (FBLA) Accounting Practice Test

What does a wholesaler do?

1. Sells products directly to consumers

2. Distributes goods to retailers

3. Manufactures goods for retail stores

4. Provides services to businesses

The correct answer is: Distributes goods to retailers

A wholesaler primarily acts as an intermediary in the supply chain, purchasing large quantities of products from manufacturers and then distributing those goods to retailers. This role is crucial in the commerce ecosystem because wholesalers enable retailers to acquire the inventory they need without having to purchase directly from manufacturers in bulk. By doing so, wholesalers help streamline the distribution process, allowing retailers to focus on selling to end consumers without needing to manage large-scale purchasing logistics. In contrast to a wholesaler, entities that sell products directly to consumers are considered retailers. Manufacturers focus on producing goods rather than distributing them. Meanwhile, businesses that provide services rather than physical products operate in distinct sectors that do not involve the wholesale of goods. Thus, the function of a wholesaler is unique and specifically centers around the distribution of goods to retailers.