This document summarizes channels of distribution and channel members. There are two main types of channels - direct, where producers sell directly to customers, and indirect, which involve one or more intermediaries. The key channel members that help move products from manufacturers to end users are agents and merchant intermediaries. Agents, like manufacturers' representatives and brokers, connect buyers and sellers but do not own the goods. Merchant intermediaries, such as wholesalers and retailers, take title of products and include specialized wholesalers and retailers that sell to businesses and consumers.

1. Channels of Distribution

2. Channels of Distribution Path a product takes from its producer or manufacturer to the final user. Personal useconsumer Businessindustrial user

3. Channel Members

4. Channels Members Intermediaries Help move products from the manufacturer to the final user Agent Intermediaries Merchant Intermediaries

5. Agent Intermediaries (Agents) Commission Bring buyers and sellers together Do not own the goods 2 types: Independent Manufacturers Representative Work with many related, non-competing manufacturers in an industry Brokers Bring buyers and sellers together Do not have a continued relationship with either party

6. Merchant Intermediaries Take title of the products 2 types: Wholesalers Buy large quantitiesresell to businesses Specialized wholesalers Rack jobbers-Manage inventory/merchandising for retailers Drop shipper- Own the goods they sell, but do not handle the products (bulk items) Retailers Sell goods to the final user for personal use

7. Direct vs. Indirect Channels Direct distribution Producer sells goods directly to the customer Advantages: Don’t share profit margins Control over the sales process Indirect distribution 1 or more intermediaries Advantages: Efficient distribution logistics Overall costs may be lower Consumers may expect choice at point of sale Producers may not have sufficient resources / expertise to sell direct

8. Distribution Channels:Consumer products/services

10. Distribution Channels:Industrial products/services

12. Resources http://ww2.nscc.edu/gerth_d/MKT2220000/Lecture_Notes/unit13_files/image002.jpg Marketing Essentials, 2009