Functions of Distribution Channels in a Business

A distribution channel is a route through which a company’s products or services reach its customers. It plays a significant role in the marketing strategies associated with a product. A distribution channel can be short where a manufacturer sells products directly to its customers, or it can be a complex network including wholesalers, distributors, retailers, etc. Hence, a distribution channel can be also referred to as a network of interconnected intermediaries who are responsible for the delivery of a company’s products to the end customers.

There are several functions carried out by these distribution channels that are associated with the delivery of the products which are listed below:

Transactional Functions

Distribution channels will make the products available for the customers whenever and wherever they want. They also make sure that the customer gets products in different quantities according to their needs.

Logistics and Physical Distribution

The assembling and storage of products will be done by distribution channels. They are also responsible for sorting and transporting the goods to locations where customers can access them.

Facilitation

Pre-sale as well as post-sale services will be also provided by channels of distribution. They facilitate services like maintenance, financing, channel coordination, information dissemination etc. Hence their duty does not end with selling the products to customers.

Creating Efficiencies

A distribution channel may purchase large quantities of products from manufacturers and distribute them to other channels or customers in different quantities. This process is known as bulk breaking. For example, a wholesaler can purchase bulk goods from a manufacturer and sell it to a large number of retailers.

There is also another way of product distribution, where the channels offer different types of products for the customers at a single place, as they won’t have to visit different retailers for purchasing different products. For example, a supermarket will have different products ranging from fruits and vegetables to apparel and electronic items. A customer will be able to purchase a variety of products under the same roof.

Sharing Risks

Most channels of distribution purchase products from in advance, hence share the risk along with the manufacturers. Therefore, they will do everything possible for selling the goods they bought.

Marketing

Distribution channels also form the marketing strategies for selling a product, hence they can be also called marketing channels. As they will be in direct contact with the customers, they can be helpful in propagating the message of a brand and product benefits to the customers.

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