What Are The Different Types of Distribution Channels

Distribution channels have a major influence on multiple other marketing decisions be it the price, the product development, employee management, or organizational structure. The role of the distribution channel such as Al Maya Trading encompasses a number of functions, each of which can be handled by one or multiple intermediaries. One of the prime tasks of distribution channels is to ensure high efficiency. They are also concerned with transportation and storage, which should be used at their maximum capacities at a minimal cost. The members of a distribution channel not only handle communication with the end customer, but are also responsible for creating a dual connection from the manufacturer to the customer. However, we mostly focus on one direction of this association – getting the product from the factory to the customer basket. Al Maya FMCG channel that returns profits, products for repair and customer die back back to the manufacturer. Depending on the selected distribution channel member’s policies with respect to any of these three functions, a manufacturer decides whether or not to use them. The following are the 3 traditional types of distribution channels in marketing:

  • Direct sales- this is ideally suited for any product that falls under the middle price range, is not purchased every day, and has a long shelf-life. Some of the examples include, stationery, air purifiers, jewellery, etc. With this mode, the manufacturer can directly communicate to customers without using any market intermediaries and will deliver the goods themselves. The popularity of direct distribution companies can be largely attributed to Internet and e-commerce, where the most crucial aspect is communication to end partner.
  • Brokers and distributors- if, as a manufacturer, you opt to work with agents and brokers, you can directly delegate part of their tasks to those intermediaries. For example, in the case of the food industry, prior to contracting a broker, the food manufacturer will have to offer the production to the stores themselves, which usually happens with small vendors. However, eventually, with the expansion of the business, the vendors would seek alternatives for shipping their produce to the store. There is usually a broker involved who handles the sales, or a distributor, who looks after the shipping of the goods in various locations.
  • Wholesalers/retailers- working with wholesalers and retailers is usually a preferred distribution chain link, since, by purchasing the product from the manufacturer, they take the risk if the products do not sell well. As far as digital products are concerned, working with resellers is the perfect option.

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