Cambridge O-Level Commerce: Outsourcing, Wholesaling and Communication (7100)

This guide explains three short sub-topics of Cambridge O Level Commerce (7100) Topic 2 Commercial operations, for examination in 2026, 2027 and 2028: 2.2 Outsourcing, 2.4 Wholesaling and 2.6 Communication. Each has only a few syllabus points, but exam questions usually set them in a business scenario, so you must apply them, not just list them. The rest of Topic 2 is in the Commercial Operations study guide.

Where this fits in 7100

These sub-topics describe how a business gets help from others: outsourcing hands production or distribution to a specialist, the wholesaler links manufacturers with retailers, and communication keeps every link in the chain working. They build on Topic 1 (in-house and outsourced production, intermediaries in a supply chain) and lead into Topic 4 Logistics in commerce.

Syllabus coverage

CAMBRIDGE O LEVEL COMMERCE (7100) — 2.2, 2.4 AND 2.6

• 2.2.1 The growth of outsourcing: contract manufacturing and logistics
• 2.4.1 The functions and services provided by the wholesaler; its importance to the manufacturer and retailer; why the independent wholesaler survives (cash and carry and voluntary chains)
• 2.6.1 Types of communication: written, oral, electronic and visual
• 2.6.2 Methods: letter, telephone, face to face, videoconferencing, email, web-based chat (including chatbots), social media and posters
• 2.6.3 Factors affecting choice: urgency, cost, security, distance, availability of networks and importance of the message

Why has outsourcing grown?

A business outsources when it pays another enterprise to do work it could do in-house. The 7100 syllabus names two growth areas.

1. Contract manufacturing. A specialist factory makes goods to the business’s design. A shoe brand, for example, may design trainers in one country and pay a contract manufacturer elsewhere to produce them.
2. Contract logistics. A specialist firm handles warehousing, packing, transport and delivery. Many online sellers send stock to a logistics firm’s warehouse, which then dispatches each order.

Growth has been driven by the search for lower costs, access to specialist skills and equipment, the wish to focus on core activities such as design and marketing, the flexibility to change output without building factories, the rise of ecommerce, which needs fast and reliable delivery, and digital communication, which makes it easy to manage a contractor far away.

Outsourcing is not risk-free: the business has less control over quality and timing, becomes dependent on the contractor, may lose confidential information, and can suffer reputational damage if the contractor’s working conditions or environmental standards are poor.

What does the wholesaler do?

The wholesaler buys large quantities from manufacturers and sells smaller quantities to retailers.

For the manufacturer	For the retailer
Places large orders, allowing long production runs	Breaks bulk into small, affordable quantities
Stores goods, saving warehouse space	Stocks a wide range from many manufacturers
Bears risk of goods not selling or being damaged	Offers credit, helping cash flow
Pays promptly	Delivers to the shop
Distributes to many retailers	Advises on new lines, prices and displays
Feeds back market information	Packs, labels or price-marks goods

Why it matters: without wholesalers, every manufacturer would have to sell to thousands of small shops, and every small shop would have to deal with dozens of manufacturers. The wholesaler cuts the number of transactions and spreads storage, risk and transport costs.

How the independent wholesaler survives. Big retailers often buy direct from manufacturers. Independent wholesalers stay in business through:

• Cash and carry — retailers collect and pay for goods on the spot. No credit or delivery keeps costs and prices low.
• Voluntary chains — independent shops agree to buy mainly from one wholesaler and trade under a shared name with joint promotions. The shops remain independently owned, but gain the bulk-buying power of a large group.

How should a business choose a communication method?

First identify the type of communication: written (letters, reports), oral (spoken, by telephone or face to face), electronic (email, web chat, social media, videoconferencing) or visual (posters, charts, signs).

Then match the method to the six factors in the syllabus.

Factor	Question to ask	Example choice
Urgency	How quickly is a reply needed?	Telephone or web chat for an urgent query
Cost	What can the business afford?	Email or social media rather than printed letters
Security	Is the information confidential?	Face to face or secure email, not social media
Distance	How far apart are the people?	Videoconferencing for an overseas supplier
Availability of networks	Is reliable internet or phone signal available?	Letter or telephone where internet is poor
Importance of the message	Is a formal record needed?	Letter for a contract or formal complaint

Chatbots on websites answer common questions instantly and cheaply at any hour, but cannot deal well with complex problems; social media reaches many customers quickly but makes complaints public; posters reach people passing a particular place but give only one-way, limited information.

Worked example

A small furniture maker sells online. It is considering paying a logistics firm to store and deliver its products, and it wants a way to answer customers’ delivery questions.

Outsourcing logistics: + specialist warehouse and vans, faster delivery,
                       frees owner to make furniture
                       - less control over how furniture is handled,
                       ongoing fees
Communication:         web chat for quick delivery questions (urgency, cost);
                       email for order confirmations (written record)
Judgement:             outsource if order volume is high enough to justify the fee

Common mistakes

• Treating outsourcing as only “cheaper” without naming contract manufacturing or contract logistics.
• Saying the wholesaler sells to the general public.
• Describing a voluntary chain as a multiple chain store owned by one company.
• Listing communication methods without linking them to the factors in the question.

Frequently asked questions

What are the two types of outsourcing named in 7100? Contract manufacturing, where another firm makes the goods, and contract logistics, where another firm stores and delivers them.

Why do small shops still use wholesalers? Wholesalers break bulk, offer a wide range, give credit and deliver, so a small shop can buy small quantities without dealing with many manufacturers.

Which factors decide the choice of communication method? The syllabus lists urgency, cost, security, distance, availability of networks and importance of the message.

Quick revision checklist

• Explain the growth of outsourcing through contract manufacturing and logistics, with a drawback.
• Give the wholesaler’s functions for the manufacturer and the retailer, and explain why it matters.
• Explain cash and carry and voluntary chains.
• Name the four types and eight methods of communication.
• Recommend a method using the six factors.

Related: Outsourcing, wholesaling and communication revision notes | Outsourcing and wholesaling practice

Official syllabus

Cambridge O Level Commerce (7100) syllabus for examination 2026, 2027 and 2028 — cambridgeinternational.org.