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Created by

VICTOR Mon
VICTOR Mon
Mexico

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by VICTOR Mon
1

What Is a Distribution Channel ?

A distribution channel is the intermediating goods from producers to end . It involves wholesalers , retailers , distributors , and digital platforms . In a distribution channel , the sells directly to the consumer . Indirect distribution channels involve multiple before the product ends up in the hands of the consumer .

2

Key Players in Distribution Channels

Producer : combine labor and capital to create goods and services for consumers .

Agent : commonly act on behalf of the producer to accept payments and transfer the title of the goods and services as they move through distribution .

Wholesaler : A person or company that sells large quantities of goods , often at low prices , to retailers .

Retailer : A person or business that sells goods to the public in small quantities for immediate use or consumption .

End : A person who buys a product or service .

3

Exploring Various Distribution Channel Models
Direct
A direct channel allows the to make purchases from the manufacturer . This direct ( and ) channel may mean lower costs for consumers because they are buying directly from the .

Indirect
An indirect channel allows the consumer to buy the goods from a or retailer . Indirect channels are typical for goods that are sold in traditional - and - mortar stores .

Hybrid
Hybrid distribution channels use direct channels and indirect channels . A product or service manufacturer may use a retailer to distribute a product or service , in addition to making sales directly with the consumer .

4

Levels of Distribution Channels : From Direct to Complex
Level 0
This is a direct - to - consumer model , where the sells its product directly to the end . Amazon , which uses its sales platform to sell its Kindle product to customers , is an example of a Level 0 ( direct ) model . This is the distribution channel possible , cutting out both the wholesaler and the retailer .

Level 1
A producer sells directly to a , who then sells the product to the end consumer . This level includes only one . For example , Hewlett - Packard and Dell are large enough to sell their computer products directly to retailers , including Best Buy .

Level 2
Including two intermediaries , this level includes the producer , wholesaler , retailer , and consumer .

In the wine and adult beverage , a winery cannot sell directly to a retailer . 1 A winery must utilize a multi - tiered system , like a Level 2 system ; the law requires the winery to first sell its product to a wholesaler , who then sells to a retailer . The retailer then sells the product to the end consumer .

Level 3
This level may add the role of the individual , sometimes referred to as a " jobber . " A is a small - scale wholesaler or middleman in the retail goods trade . This role may involve products from a variety of producers , storing them , selling them to retailers , and acting as a middleman for wholesalers and retailers .

 
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