What Are The Types Of Distribution Channels?

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Ian John Profile
Ian John answered
Distribution channels are used by companies to enter the consumer market with their product and there are two main types of distribution channels: Indirect channel and direct channel.

The definition of a distribution channel is a method that a company uses as a way of getting their products into the marketplace so that they can be purchased and used by consumers. The most traditional channel goes from the supplier to the manufacturer, to the distributer, the wholesaler and then finally to the retailer. This method has changed due to advancements in technology and the Internet to form the two main distribution channels that exist today: Direct and indirect.

A direct distribution channel is used when a company sells its products directly to the consumers. Although this method was not popular, it has experienced a significant increase due to the Internet. Companies out there who are needing to cut costs will often use a direct distribution channel in order to 'cut out the middle man'.

Methods of direct distribution include selling agents and Internet sales which are the two most commonly used methods. The Internet is a very easy distribution channel because of the fact that it is so easy for people to access it. Selling agents work for the company in question and market the company's products directly to customers.

An indirect method of distribution is used by companies who do not sell their products directly to consumers. The initial suppliers and manufacturers favor this method because of their early existence in the supply chains. Depending on the industry and product type, direct channels of distribution have appeared to become more widespread due to the rise of the Internet.

Examples of the most common indirect channels include distributors, wholesalers and retailers. Companies choose these methods in order to gain the best possible market share for their product. It also allows companies to focus purely on producing the goods and products whilst others take care of the other factors.
Anonymous Profile
Anonymous answered
Definition
A distribution channel is the method a company uses to get their products into the marketplace for consumer use. The traditional channel goes from supplier, manufacturer, distributor, wholesaler and retailer. Two types of distribution channels exist, indirect and direct.
Indirect Channel
The indirect channel is used by companies who do not sell their goods directly to consumers. Suppliers and manufacturers typically use indirect channels because they exist early in the supply chain. Depending on the industry and product, direct distribution channels have become more prevalent due to the Internet.
Direct Channel
A direct distribution channel is where a company sells their products direct to consumers. While direct channels were not popular many years ago, the Internet has greatly increased the use of direct channels. Additionally, companies needing to cut costs may use direct channels to avoid middlemen markups on their products.
Indirect Channel Methods
Distributors, wholesalers and retailers are the primary indirect channels a company may use when selling their products in the marketplace. Companies choose the indirect channel best suited for their product to obtain the best market share; it also allows them to focus on producing their goods.
Direct Channel Methods
Selling agents and Internet sales are two types of direct distribution channels. Selling agents work for the company and market their products directly to consumers through mail order, storefronts or other means. The Internet is an easy distribution channel because of the global availability to consumers.
Hassan Raza Profile
Hassan Raza answered
This occurs when customers post orders for books or magazines directly to publisher who then send them their orders directly. It also occurs when something is made especially for a customer like suit, furniture. Consumers who demand individuality in design for such personal effects normally have to pay more what they have to pay for the same type of goods which is mass produced. It also occurs in case of highly expensive or specialize goods, which are purchased by the government or big companies.

Some times goods are delivered by the manufacturers to the wholesaler who in turn supplies to the retailer district. Public then purchases the products from the retailer. Some times goods are delivered by the manufacturers to the retailer who is turned sold goods to the consumers. Most of these retailers are large stores that have sufficient funds to buy in bulk directly from the manufacturers. The main advantage of the bulk buying is the large discount given that enables these retailers in terms of ability to offer a great variety of goods at reasonable prices. In many cases retail shop are owned by the manufacturers like those selling footwear, medicine etc.

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