Question

Carolyn McGee wants to get into fashion merchandising. Because of the risks involved in high fashion, and how quickly fashions go out of date, Carolyn doesn't want to start a company in which she has title to the clothing. Carolyn will have to rule out which of the following middleman classifications in her choice of business?a) brokerb) agentc) merchant wholesalerd) manufacturer's agent

Answer 1

Answer:

c) merchant wholesaler

Explanation:

A  merchant wholesaler is a business unit that buys merchandise in bulk from manufacturers and resells to retailers in smaller quantities. The wholesale business has profit motives. It forms a link between manufacturers and retailers.

Unlike agents and brokers, merchant wholesalers take ownership of the goods they buy.  Carolyne should avoid becoming a merchant wholesaler. As a wholesaler, she will own all the merchandise she purchases. She can choose to be either an agent or broker as these do not take title to the merchandise.