Question

Effective January 2, 2021, Loblaws began charging its suppliers an additional 1.2 percent to the already existing fee they charge for things such as in-store promotions. As a supplier hoping to distribute products through Loblaws, this could be seen as a disadvantage of using a ___________ for distribution.

A) agent/broker
B) wholesaler channel
C) retailer channel
D) direct channel

Answer 1

The additional 1.2 percent fee Loblaws charges suppliers is a disadvantage of using a retailer channel for distribution, impacting costs and potentially affecting pricing and profit margins.

Step-by-step explanation:

As a supplier considering distribution of products through Loblaws, the increase in fees for services such as in-store promotions can be seen as a disadvantage of using a retailer channel for distribution. This is because the retailer, in this case Loblaws, interacts directly with the end consumer and has control over the terms and fees for product placement and promotions within their stores.

The additional 1.2 percent fee is an increased cost of doing business with the retailer, which may affect the supplier's profit margins or the pricing of their products.