Future Business Leaders of America (FBLA) Agribusiness Practice Test

What does wholesale buying involve?

1. Purchasing in small quantities for resale

2. Buying large quantities to resell in smaller amounts

3. Selling products directly to consumers

4. Manufacturing goods for retail

The correct answer is: Buying large quantities to resell in smaller amounts

Wholesale buying primarily involves the acquisition of large quantities of goods with the intention of reselling them in smaller amounts. This practice enables wholesalers to benefit from economies of scale, as purchasing in bulk typically results in lower costs per unit. By acquiring goods at a wholesale price, businesses can then sell those items at retail prices to generate a profit. This purchasing model is crucial for retailers, as it allows them to stock a variety of products without having to deal with the costs and complexities of manufacturing. Additionally, wholesale buying can also help businesses maintain an adequate inventory to meet consumer demand efficiently. The other choices represent different business models. Purchasing in small quantities for resale focuses on retail operations rather than wholesale, while selling products directly to consumers refers specifically to retail models, and manufacturing goods for retail implies a production role rather than a buying function. Each of these options doesn't align with the core concept of wholesale buying, which centers on bulk purchasing for subsequent smaller-scale resale.