Channels of Distribution - QS Study
QS Study

Channels of Distribution

In case of big number of customer products, the possible buyers are scattered over a wide geographical region. A distribution channel is a chain of businesses or mediators through which a good or service passes until it reaches the end customer. It can contain wholesalers, retailers, distributors and even the internet itself. In order to contact these people proficiently and efficiently, it is significant to take the help of number of mediators as contacting them directly may not be cost efficient and may be hard even otherwise.

Channels of Distribution are set of firms and persons that take label, or assist in transferring title, to particular goods or services as it moves from the producers to the customers. In other words, channel refers to a team of merchants, agents, combine physical movement and title movement of products to reach specific destinations.

Typically goods and services are distributed through a network of marketing channels. For example we buy merchandise of our need such as salt, bulb, tea, sugar, soap, paper, books, flour, etc., from retail sellers.

There are two types of Channels of Distribution

Direct Channel or Zero Level Channels: When the producer instead of selling the commodities to the mediator sells it directly to the customer then this is known as Zero Level Channel. Retail outlets, mail order selling, internet selling etc.

Indirect Channels: When a producer gets the help of one or more middlemen to move commodities from the manufacture place to the place of expenditure, the distribution channel is called indirect channel.