Business distribution can sometimes be a simple matter. Eggs and milk for example can be delivered to the door directly by the farmer but in most cases goods must move long distances and pass through several hands in going from producer to consumer. From the factory the goods are shipped to different sections of the country. A wholesale house buys various of products in large quantities from producers and resells them in smaller quantities to retailers.
In the chain of distribution the wholesaler acts as an important link. The reason is because from the wholesale house, the goods are distributed to different retailers. The merchants are the ones who deal ultimately with the consumers, and the consumers are the people who use the products. All retail stores have a common purpose; to sell goods directly to consumers.
Production, distribution and there is a third phase of business activity. This one neither produces goods nor distributes them, but whose main function is to provide needed services. This phase is called, communication.
The ability to be able to communicate rapidly with people from across town and across the world has helped bring more cooperation between different business organizations, and has made all business activity more interdependent upon one another.
Another essential business service is transportation. Modern means of transport enable all of us to move about quickly and wherever we wish. It also allows business to draw upon the resources of the world and to distribute the products of farm and factory in great quantities and to many people. Rapid communication and transportation have made the world of business truly, one world.