The distribution channel is the means used to get the product from its manufacturer to the final consumer. It can have a large number of links, which can complicate the arrival of the product and similarly negatively influence sales. There are two different distribution channels: The direct and the indirect. The first is to contact buyers directly, while the second is to pass the product through several hands.
Distribution channels are the channels through which a product is shipped, from the company in which the producer makes the products to the point of destination, which is the consumer. These channels can affect the product in many ways, from its price (if the distribution channel is more expensive, the product will also become more expensive) to its popularity among the public (the longer a product takes, the less likely it is that people will want to consume it), so it is important to be clear about which distribution channel we want to have for our product.
There are two main types of distribution channels:
Direct: This is a distribution channel in which the producing company sells its products directly to its buyers. This is normal for companies that sell industrial products.
Indirect: This distribution channel is when a company uses other companies or individuals as intermediaries in the sale of the product. This chain may have a large number of intermediate points to achieve the sale of the product.
Indirect channels are also divided according to their relevance and geographical location, which are responsible for the delivery of products in certain places.
Indirect distributors are further divided into two types:
Wholesalers: Wholesale distributors are the intermediary between the manufacturer and retailers. They purchase products and services in large quantities for resale to other wholesalers, other manufacturers or retailers. Wholesalers serve as a point of liaison between the company and other companies.
Retailers: Retailers are distributors who link the offerings of wholesalers or other retailers to customers directly. The main purpose of these distributors is to group different suppliers and create assortments for the final consumer and to grant credit and payment facilities.
The complex structure of the distribution channel brings together different businesses or organizations. It is therefore a highly complex structure of product transfer from the initial producer to the customer or end user.