Distribution

• what are distribution channels?


  Pathways to get products from producers to consumers.
• what are channel intermediaries?


  organisations involved in various stages of distribution
• what are wholesalers?


  buy products from producers in bulk and supply in small quantities to retailers
• what are retailers?


  Businesses that sell goods or services directly to consumers.
• what are direct channels?

  when the product is sold from the consumer straight to the customer
• what is online distribution?

  when the product is sold from the producer to the customer via e-commerce
• what is multi-channel distribution?

  when a producer uses more than one path to consumers
• what is digital distribution?

  the delivery of digital content
• advantages of wholesalers?

  • wide market coverage
  • reduced costs
  • better service for small retailers
• disadvantages of wholesalers?

  • loss of profit OR higher price (less demand)
  • loss of contact
  • loss of control
• advantages of retailers?

  • meet the customers needs
  • sold in convienient locations
  • allows customers to see and touch product
  • retailer deals with after sale services
  • provide credit terms
  • can focus on manufacturing
• disadvantages of retailers?

  • profit margins cut
  • rival products are also stocked
  • risk
  • lack of control
• advantages of direct channels?

  • keep all profit margins
  • retain control
  • communicate with customers
• disadvantages of direct channels?

  • distribution costs can cut into profit margins
  • harder to sell products without a retailer
  • investment to build distribution networks necessary
• advantages of multi-channel distribution?

  • wider market reach
  • competitive advantage
• disadvantages of multi-channel distribution?

  • channel conflicts
  • higher costs
• advantages of digital distribution?

  • higher sales
  • data analytics
  • cost efficiency
  • tailored experience
• disadvantages of digital distribution?

  • digital divide
  • digital piracy
  • initial set up costs