Distribution channels are one of the crucial working parts of any business network- much like the arteries and the veins of the body supplying blood and nutrients. A flawed distribution channel can present you with challenges that will eat into your business and eventually bring it to its knees. As the name suggests, it is the channel in which goods or services are switched hands.
A sweater shop manufacturer will sell his lot to a wholesaler, who in turn finds smaller wholesalers and eventually retailer to sell the sweaters to. If the distribution channels or intermediaries are not optimised, then there will be grave losses on the side of the business. After all, the main task of a distribution channel is to ‘efficiently’ transport, store, and sell to the interested parties. But we are not here to teach you the ins and out of distribution channels in general, but more about distribution channels for marketing. Read on…
Distribution Channels In Marketing And Its Types
How well oiled the distribution channels are, the better it will influence other marketing aspects positively- be it the price, the product development, the organisational structure, and so on. The various types of distribution channels are noted below:
These are best for those products that have a medium to long shelf life and don’t classify in the high price range. These include air purifiers, pens, books, utensils to name a few. Direct distribution means that the manufacturer directly interacts with the customer and there are no middlemen. They often deliver the goods to the customers themselves. This makes the customer feel a sense of ‘intimacy’ and importance that help to retain customers.
Wholesalers And Retailers
This partnership is sought after as the risk is beautifully distributed amongst the two, in case the product or service doesn’t sell well. Working with resellers is perfect, especially for digital products. The best way to make it profitable for both is to communicate well and create a base. Building a relationship between the retailer and the wholesalers will increase the scope of profitability, make them feel like part of the work culture, and most importantly build trust and loyalty.
These include agents and brokers which will breakdown your tasks at hand. They act as an extension of the producer and in every sense of the word; they help represent the producers before the customer. The distribution franchise will be exposed to a wider network, but one of the issues with the same is that they may not know the product or be as invested as much as the producers. This hampers promotion and creates a not-so-impressive rapport with the target audience.