Distribution Channels and its Kinds

Marketing channels are the ways that goods
and services are made available for use by the
consumers. All goods go through channels of
distribution, and your marketing will depend
on the way your goods are distributed. The
route that the product takes on its way from
production to the consumer is important
because a marketer must decide which route
or channel is best for his particular product.
Manufacturer to Customer
Manufacturer makes the goods and sells them
to the consumer directly with no intermediary,
such as a wholesaler, agent or retailer. Goods
come from the manufacturer to the user
without an intermediary. For example, a
farmer may sell some produce directly to
customers. For example, a bakery may sell
cakes and pies directly to customers.
Manufacturer to Retailer to Consumer
Purchases are made by the retailer from the
manufacturer and then the retailer sells the
merchandise to the consumer. This channel is
used by manufacturers that specialize in
producing shopping goods. For example,
clothes, shoes, furniture and fine china. This
merchandise may not be needed immediately
and the consumer may take her time and try
on the items before making a buying decision.
Manufacturers that specialize in producing
shopping goods prefer this method of
distribution.
Manufacturer to Wholesaler to Customer
Consumer’s can buy directly from the
wholesaler. The wholesaler breaks down bulk
packages for resale to the consumer. The
wholesaler reduces some of the cost to the
consumer such as service cost or sales force
cost, which makes the purchase price cheaper
for the consumer. For example, shopping at
some of the warehouse clubs, the customer
may have to buy a membership in order to buy
directly from the wholesaler.
Manufacturer to Agent to Wholesaler to
Retailer to Customer
Distribution that involves more than one
intermediary involves an agent called in to be
the middleman and assist with the sale of the
goods. An agent receives a commission from
the producer. Agents are useful when goods
need to move quickly into the market soon
after the order is placed. For example, a
fishery makes a large catch of seafood; since
fish is perishable it must be disposed of
quickly. It is time consuming for the fishery to
contact many wholesalers all over the country
so he contacts an agent. The agent distributes
the fish to the wholesalers. The wholesalers
sell to retailers and then retailers sell to
consumers.