The document outlines the concepts of wholesale and retail trade in the pharmaceutical sector, detailing the channels of distribution from manufacturers to consumers. It emphasizes the roles of various intermediaries, including wholesalers and retailers, and explains the regulations governing pharmaceutical distribution under the Drugs and Cosmetics Act of 1945. Direct channels are prohibited in pharmaceuticals, necessitating the use of middlemen for product distribution.

1. D. R. Chandravanshi
Asst. Professor (Ad hoc)
Department of Pharmacy,
Guru Ghasidas Vishwavidyalaya Bilaspur C.G.

2. ▪ Introduction
▪ Wholesale trade and wholesaler
▪ Retail trade and retailers
▪ Departmental stores
▪ Multiple shops
▪ Mail order sales houses
▪ Consumer cooperative stores
▪ Super markets
▪ Factors affecting the selection of channel of distribution

3. ▪ Distribution is significant rated as a significant function of marketing. After
production a product moves to the market and finally to the consumer.
▪ This journey of the product from the manufacturer or producer to the consumer is
made possible through certain defined paths, termed as, “Channels of
Distribution”
Channels of
Distribution
Direct Channel
(Short, Straight & Direct)
Indirect Channel
(Long, Indirect, Depend on Middle men)
One level
Two Level
Three Level

4. ▪ Channels of Distribution- After production, a product moves to the market and
finally to the consumer. On the basis of involvement of middle men the channel of
distribution can be divided as follows:
1. Direct channel (Zero level). In this case no middle men is involved and
produces are sold directly by the manufacturer to the consumer.
MANUFACTURER CONSUMER
DIRECT
NO MIDDLE MEN

5. 2. Indirect Channels. These channels are indirect, long and require the aid of
specially qualified/skilled people foe the distribution. Since these people act as
intermediaries between the producer and consumer for the distribution of goods,
these are called as “Middle Men.” Depending on the number of middlemen
involved at different levels, these are further classified as:
MANUFACTURER CONSUMER
RETAILER
MIDDLE MEN
1. ONE LEVEL

6. 2.TWO LEVEL
MANUFACTURERS
CONSUMER
WHOLESELLERS
MIDDLE MEN AT FIRST
LEVEL
MIDDLE MEN AT
SECOND LEVEL
RETAILERS
3.THREE LEVEL
MANUFACTURERS
CONSUMER
DISTRIBUTOR
MIDDLE MEN AT FIRST
LEVEL
MIDDLE MEN AT
SECOND LEVEL
WHOLESELLERS
MIDDLE MEN AT THIRD
LEVEL
RETAILERS

7. ▪ Distribution of pharmaceuticals is governed by certain rules under Drugs and
Cosmetics Act (1945).
▪ Direct channels are not allowed in pharmaceuticals.
▪ Various channels are as follows:
MANUFACTURERS PHYSICIAN CONSUMER
MANUFACTUR
ERS
PHYSICIAN PHARMACIST PATIENT
MANUFACTUR
ERS
WHOLESELLE
R
PHYSICIAN PATIENT
MANUFACTUR
ERS
WHOLESELLE
RS
RETAILERS PATIENT

8. ▪ Wholeseller is a middle man between manufacturer and retailer and the business
is called as wholesale trade.
Functions of wholesellers.
• Quick Distribution.
• Warehousing
• Assembling
• Advertising
• Grading/packaging
• Transportation
• Risk bearing