Please enable JavaScript.
Coggle requires JavaScript to display documents.
Unit 1 - Distribution Channel :star: - Coggle Diagram
Unit 1 - Distribution Channel
:star:
Distribution channel
= the route taken by a product from the producer to the customer
Direct selling
= producers sell their products directly to customers
Agent
= an intermediary that brings together buyers and sellers.
Two stage
: Produces > Consumers
:red_cross: high distribution costs
:check: direct contact with customers
Three stage
: Producers > Retailers > Consumers
:check: producer sells in large quantities to retailers
:red_cross: no direct contact with customers
:check: reduced distribution costs compared to selling directly to customers
Changes in distribution methods
Online distribution
=
B2C. Most webbed retailing involves ordering goods online and taking delivery at home. However, new 'click&collect' services are being developed where people order goods online and pick them at the store
B2B. Businesses can also use specialist softwares to purchase resources. This software helps to find the cheapest supplier and carries out all the paperwork.
Changing from product to service
=
Businesses that once sold products are now selling services and have to consider how this impacts on their distribution
For example, DVD's are not sold anymore, its now online streaming
Four stage
: Producers > Wholesalers > Retailers > Consumers
:check: small retailers can buy fresh products in smaller quantities.
:red_cross: maybe more expensive for the small shop to buy from wholesaler than if it is brought from the manufacturers
:check: wholesaler saves storage space for small retailer and reduces storage cost
:red_cross: wholesaler may not have the full range of products
Wholesaler
= a business that buys goods from manufacturers and sells them in smaller quantities to retailers
Retailer
= a business that buys goods from manufacturers and retailers sells them in small quantities to customers