Distribution channels include wholesalers, retailers, distributors, and the Internet. In a direct distribution channel, the manufacturer sells directly to the consumer. Indirect channels involve multiple intermediaries before the product ends up in the hands of the consumer. The channel I am most interested in is Marketing Channels in the Supply Chain.
There are basically four types of marketing channels:
- Direct selling;
- Selling through intermediaries;
- Dual distribution; and.
- Reverse channels.
A level zero distribution channel is the simplest. It involves a direct sale from manufacturers to consumers with no intermediary.
The primary purpose of any channel of distribution is to bridge the gap between the producer of a product and the customer, whether the parties are located in the same community or in different countries thousands of miles apart. The channel of distribution is defined as the most efficient and effective manner in which to place a product into the hands of the customer. The channel is composed of different institutions that facilitate the transaction and the physical exchange.