Short Distribution Channels:
Expensive, complex goods
Bespoke (custom made) products
Long Distribution Channels
Inexpensive, simple goods
How to get the product from factory to customer.
Direct Selling (0-level channel):
manufacture ----> customer The internet has made it easier for producer to sell direct to the customer this is called e-commerce.
Indirect Selling (1-level channel)
manufacture ----> retailer----> customer
Direct selling through an agent (1-level channel)
: manufacture ----> agent ----> consumer
Indirect Selling (2-level channel)
wholesaler ----> retailer----> consumer This is a traditional distribution channel used for conveniences goods, eg fast food chains
Business choose a channel of distribution to suit their needs:
More profitable to sell direct, because retailer and wholesales do not take a slice of the profit.
On the other hand it is easier to use intermediaries, especially for conveniences goods.
The fewer intermediaries in the distribution chain, the more control a manufacture has over how it products are sold.
UK retailers trends have changed in recent years, as retailers have found cheaper more effective ways of distributing their products. Out-of-town retail parks, concessions (shops within shop), and mail order catalogues have cheaper overheads than high street stores and often offer customers other benefits, such as free parking.