A cash-and-carry wholesaler does NOT:
A. store inventory.
B. anticipate his customers’ needs.
C. take title to the products he sells.
D. grant credit.
E. stock the products he sells.
The correct answer and explanation is :
The correct answer is D. grant credit.
Explanation:
A cash-and-carry wholesaler is a type of wholesaler who sells products to retailers or other businesses without offering credit. These wholesalers operate on a cash-only basis, meaning that customers are required to pay upfront in full for the goods they purchase, rather than receiving credit terms or the option to pay later. This distinguishes cash-and-carry wholesalers from other types of wholesalers who might offer extended payment terms to their clients. Let’s break down each of the options in the question:
- A. Store inventory: Cash-and-carry wholesalers typically have warehouses or retail spaces where they store inventory. Customers can select the products they wish to buy and take them immediately. So, they do store inventory. This option is incorrect.
- B. Anticipate his customers’ needs: Like other wholesalers, cash-and-carry wholesalers often keep track of trends and demand to anticipate their customers’ needs and stock the products accordingly. However, unlike some wholesalers who may provide personalized service or order fulfillment based on future demand, cash-and-carry wholesalers are more likely to stock commonly requested goods. This means they do anticipate customers’ needs, making this option incorrect.
- C. Take title to the products he sells: Cash-and-carry wholesalers, like most wholesalers, take title to the products they sell. This means they own the goods they offer until they are sold to the customer. Therefore, they do take title to the products, and this option is incorrect.
- D. Grant credit: As mentioned earlier, cash-and-carry wholesalers typically operate on a cash-only basis, requiring immediate payment for the goods sold. They do not grant credit to customers, which makes this the correct answer. They avoid the complexities and risks associated with extending credit, focusing on quick transactions instead.
- E. Stock the products he sells: Cash-and-carry wholesalers keep a physical inventory of the products they sell. This means they do stock the products they offer for sale, making this option incorrect.
In summary, the defining characteristic of a cash-and-carry wholesaler is the requirement for payment at the time of purchase, and they do not grant credit to their customers, making option D the correct answer.