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The Distribution Channel can be termed as the path through which goods and services travel from the vendor to the consumer or payments for those products travel from the consumer to the vendor. A distribution channel can be as short as a direct transaction from the vendor to the consumer, or may include several interconnected intermediaries along the way such as wholesalers, distributers, agents and retailers. Each intermediary receives the item at one pricing point and movies it to the next higher pricing point until it reaches the final buyer. Coffee does not reach the consumer before first going through a channel involving the farmer, exporter, importer, distributor and the retailer. Also called the channel of distribution. Hence determining the channel of distribution is very important for the organisation so that they can decide upon how to eliminate the middlemen and agents if required.
Distribution channels are the different channels that help in the movement of goods from producer to the end user. It includes wholesalers, retailers, logistics parties, agencies etc. These all help the movement of goods in a proper and coordinated flow. The producer produces the goods then supplies it to the wholesaler. The retailer then buys from the wholesalers and finally the end consumer will buy from the retailer etc. This is the general and normal distribution channel but not true for all types of organisations. Logistics and agency parties come into picture where the organisation is quite huge enough and the production capacity is also large enough. Some organisations avoid distribution channels as it amounts to an increase in costs. So, it depends upon organisation whether they want distribution channels or not.
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