Understanding of distribution channel

1. DISTRIBUTION
CHANNEL

2. WHAT IS A DISTRIBUTION CHANNEL?
 A distribution channel is a chain of businesses or
intermediaries through which a good or service
passes until it reaches the final buyer or the end
consumer. Distribution channels can include
wholesalers, retailers, distributors, and even the
internet.
 Distribution channels are part of the downstream
process, answering the question "How do we get
our product to the consumer?" This is in contrast to
the upstream process, also known as the supply
chain, which answers the question "Who are our
suppliers?"

3.  A distribution channel represents a chain of
businesses or intermediaries through which the
final buyer purchases a good or service.
 Distribution channels include wholesalers, retailers,
distributors, and the Internet.
 In a direct distribution channel, the manufacturer
sells directly to the consumer.
 Indirect channels involve multiple intermediaries
before the product ends up in the hands of the
consumer.

4. UNDERSTANDING DISTRIBUTION CHANNELS
 A distribution channel is a path by which all goods and
services must travel to arrive at the intended consumer.
Conversely, it also describes the pathway payments
make from the end consumer to the original vendor.
Distribution channels can be short or long, and depend
on the number of intermediaries required to deliver a
product or service.
 Goods and services sometimes make their way to
consumers through multiple channels—a combination of
short and long. Increasing the number of ways a
consumer is able to find a good can increase sales. But
it can also create a complex system that sometimes
makes distribution management difficult. Longer
distribution channels can also mean less profit each
intermediary charges a manufacturer for its service.

5. DIRECT AND INDIRECT CHANNELS
 Channels are broken into two different forms—
direct and indirect. A direct channel allows the
consumer to make purchases from the
manufacturer while an indirect channel allows the
consumer to buy the goods from a wholesaler or
retailer. Indirect channels are typical for goods that
are sold in traditional brick-and-mortar stores.
 Generally, if there are more intermediaries involved
in the distribution channel, the price for a good may
increase. Conversely, a direct or short channel may
mean lower costs for consumers because they are
buying directly from the manufacturer.

6. INCLUDING STRATEGIC PARTNERS IN YOUR
DISTRIBUTION CHANNELS
 If your company is a typical start- up or early- stage
company, then you’re big on ideas and short on
resources. You need to leverage your marketing
strategy by including strategic partners as a part of
your distribution channel. If your sales strategy
includes having you and your two sales staff
knocking on door, then your ability to scale is
limited. But if you can enlist others as part of your
distribution channel, you can grow more quickly by
leveraging the pre- existing infrastructure and client
relationships that distributors already have in place.

7.  When you think of your distribution channels, you
need not be limited to traditional retail or B2B
channels. Creative venture companies are always
finding new ways to reach their customers. Here
are a few to think about:

8.  Affiliate marketing: In this approach, you create a
network affiliates who make the sale for you while
taking a cut of typically 10 to 20 percent on each
sale. Thousands of bloggers and other content-
laden websites that draw traffic are able to convert
their visitor to customers, thus monetizing their sites
while increasing your sales and profits.
 GPS-based marketing: In this approach, your
research customers based on their location.
Imagine an app that causes your cell phone to
vibrate whenever you pass a sushi restaurant or
bookstore. This type of thinking turns traditional
distribution channel thinking on its head by creating
customers in non- traditional ways.