Common Channels of Distribution Part 2

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Direct Channel

In Direct channel, producers sell their goods and services directly to the consumers. There is no middleman to come between the producers and consumers. The producers may sell directly to consumers through door-to-door salesmen and through their own retail stores. For example, Bata India Ltd, HPCL, Liberty Shoes Limited has their own retail shops to sell their products to consumers. For certain service organizations consumers avail the service directly. Banks, consultancy firms, telephone companies, transport services, etc. are examples of direct channel of distribution of service.

Direct channel Distribution

Direct Channel Distribution

Direct channel Distribution

Indirect Channel

If the producer is producing goods on a large scale, it may not be possible for him to sell goods directly to consumers. As such, he sells goods through middlemen. These middlemen may be wholesalers or retailers. A wholesaler is a person who buys goods in large quantities from producers; where as a retailer is one who buys goods from wholesalers or producers and sells ultimate by to consumers as per their requirements. The involvement of various middlemen in the process of distribution constitute the indirect channel of distribution is given below,

Indirect Channel Distribution

Indirect Channel Distribution

Indirect Channel Distribution

This is the common channel for the distribution of goods to ultimate consumers. Selling goods through wholesaler may be suitable in case of food grains, spices, utensils, etc. and mostly of items, which are smaller in size.

Indirect Distribution channel( For Small size items)

Indirect Distribution Channel( for Small Size Items)

Indirect Distribution channel( For Small size items)

Under this channel, the producers sell to one or more retailers who in turn sell to the ultimate consumers. This channel is used under the following conditions –

  • When the goods cater to a local market, for example, breads, biscuits, patties, etc.

  • When the retailers are big and buy in bulk but sell in smaller units, directly to the consumers. Departmental stores and super bazars are examples of this channel.

Wholesalers and Retailers

Wholesalers and retailers are important middlemen who generally facilitate flow of goods from the producers to the consumers.

Wholesalers

Wholesalers are one of the important middlemen in the channel of distribution who deal with the goods in bulk quantity. They buy goods in bulk from the producers and sell them in relatively smaller quantities to the retailers. In some cases, they also sell goods directly to the consumers if the quantity to be purchased is more. They usually deal with a limited variety of items and also in a specific line of product, like iron and steel, textiles, paper, electrical appliances, etc. Let us know about the characteristics of wholesaler.

Characteristics of Wholesalers

The followings are the characteristics of wholesalers:

Characteristics of Wholesalers

Characteristics of Wholesalers

Characteristics of Wholesalers