Distribution channels
Chris and Julie talk about using distribution to help their business be successful
Place is concerned with how goods and services reach customers. This includes how customers access products, and how products are transported from producers to customers. The different ways of moving goods from producers to customers are called channels of distribution. Common channels of distribution are:
- producers
- A store (or person) that sells products directly to customers.
- A business that sells goods and services using the internet.
Direct channels of distribution
A direct channel of distribution only involves the producer and the customer. The producer sells products directly to customers in a physical shop, using a website or through the post. For example, a farmer might sell produce directly to customers through a physical shop.
The advantage for a producer of selling directly is that they can control the distribution of their products and the prices that are charged. However, the disadvantage is that it can become increasingly difficult to sell directly to a large number of customers.
Indirect channels of distribution
An indirect channel of distribution introduces an A person or organisation that acts as a link between other parties. into the distribution process. These intermediaries:
- make it easier for producers to distribute their products
- make it more convenient for consumers to buy those products
For example, retailers and e-tailers are both types of intermediary. They buy products in bulk from producers and then sell them in smaller quantities to consumers.