Links in the Distribution Chain

Manufacturers must find the most efficient ways of getting the goods manufactured into the hands of consumers.

The channels/chains of Distribution

Channels of distribution refer to the means by which commodities reach the hands of consumers from the plant of manufacturers. This may be done directly from the manufacturer to the consumer or indirectly through middlemen such as wholesalers and retailers.

Types of Channels

1. Direct Channel – Manufacturer – Consumer

Goods are bought directly from the producer e.g. purchasing furniture from a manufacturer.

2. Indirect channels (a)    Manufacturer – Retailer – Consumer

Goods are bought from a middle man e.g. a retailer. Retailers display goods, sell in small convenient quantities and offer credit. They therefore aid manufacturers in moving goods quickly.

3. Indirect channel (b)   Manufacturer –Wholesaler – Retailer – Consumer

The wholesaler is a second muddle man/link on the chain. The wholesaler purchases in bulk from the manufacturer and stores them in large warehouses. They therefore assists manufacturers by moving large amounts of items from plant  Retailers purchase goods from wholesalers and sell them in smaller quantities to consumers.

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