(i) Due to additional functions to producers,it will reduce their specialization in production.
(ii) Prices may fluctuate due to unsteady flow of goods.
(iii) Manufacturers would set up distribution centers/ depots or warehouses which are additional costs to manufacturers.
(iv) The cost of distribution may be increased and the subsequent increase passed on to consumers in form of higher prices.
(v) The retailers would have to go to manufacturers, which is an additional cost to retailers.
(vi) The producers would have to break the bulk because retailers may not be able to buy in large quantities.
(vii) Manufacturers may be required to extend credit facilities to retailers, which require additional financial capital.
maurice.mutuku answered the question on July 21, 2017 at 05:35
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