Channel of distributions

Producer ----> consumer

Producer ---> retailer ----> consumer

Producer ----> wholesaler -----> retailer -----> consumer

Producer ----> agent ----> wholesaler ----> retailer ----> consumer

Pros

Cons

producer earned all profit

producers control all part of marketing mix

quickest methods

producers has direct contact with customers

consumers are not always see or try the products before purchase

high delivery costs

storage costs and promotional activities must be done

Pros

Cons

consumers see and try the products

retailer paid holding inventories costs

promotional activities paid by retailer

conveniently located for consumers

some profit taken by retailers

producers lose control in marketing mix

producer must pay delivery costs

competitor's products sell

Pros

Cons

Pros

Cons

wholesalers buy in bulk then break down for retailers

more channel of promotion

storage costs and tranposrt costs are shared

producer sells its product to a larger market

producers lose more control over marketing mix

middleman takes part of the profit

agent has specialist knowledge, especially foregin -> link between everyone

another middleman is added, reduced profit to the producer