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A typical retail store - especially a mom and pop store, will only be able to buy limited quantities of products. For instance, 50 packs of biscuits etc.. these

A typical retail store - especially a mom and pop store, will only be able to buy limited quantities of products. For instance, 50 packs of biscuits etc.. these sorts of volumes are too small for a manufacturer to ship directly to retail establishments because transport logistics will add a huge cost to each such shipment. Consider, for example, that a shop in Bangalore needs to buy 50 packets of biscuits for sale each week from a manufacturer in Pune. Each such shipment will cost at least a few 100 rupees for transport from Pune to Bangalore once a week. This will push up prices a LOT. The way around is for the manufacturer to have a relationship with a distributor in Bangalore and they will ship several tonnes of biscuit packets (1000s of packets) once every couple of weeks from Pune to Bangalore. This is much cheaper from a logistics standpoint. So having distributors reduces the cost overall and distributors also take back expired products, handle returns etc.

froh 5y ago
In some countries retailer's cooperatives are the backbones of many mom and pop stores. They are large towards the manufacturer and are de facto non profits for the co-owner-shareholder co-op member shops, large and small. EDEKA is a large German one. https://en.m.wikipedia.org/wiki/Retailers%27_cooperative https://en.m.wikipedia.org/wiki/Retailers%27_cooperative
- throwawaysea 5y ago
  This is also true in the US for independent grocery stores in many regions. They don’t have the capital and buying power of major chains, but are able to exist by teaming up.
- pkphilip 5y ago
  Whichever way you do it, the distribution process will add to the final price because someone needs to pay for transport to the city, distribution to the retail stores etc. A non-profit may only charge enough to cover their cost but it is nonetheless an additional step in the supply chain. However, it would still be cheaper than attempting to send products directly from manufacturers to retail customers in a completely different city.

froh 5y ago

In some countries retailer's cooperatives are the backbones of many mom and pop stores. They are large towards the manufacturer and are de facto non profits for the co-owner-shareholder co-op member shops, large and small. EDEKA is a large German one. https://en.m.wikipedia.org/wiki/Retailers%27_cooperative https://en.m.wikipedia.org/wiki/Retailers%27_cooperative

throwawaysea 5y ago
This is also true in the US for independent grocery stores in many regions. They don’t have the capital and buying power of major chains, but are able to exist by teaming up.
pkphilip 5y ago
Whichever way you do it, the distribution process will add to the final price because someone needs to pay for transport to the city, distribution to the retail stores etc. A non-profit may only charge enough to cover their cost but it is nonetheless an additional step in the supply chain. However, it would still be cheaper than attempting to send products directly from manufacturers to retail customers in a completely different city.