Channels of Distribution

Channel of Distribution Path a product takes from its producer or manufacturer to the final user When product is used for business, it is called an industrial user. When a product is used for personal use, it is called a consumer

Channel Members Called intermediaries – or middlemen Reduce the number of contacts required to reach the final user of the procut Major classifications: wholesaler or retailer

Wholesaler Buys in large quantities from manufacturers Stores the goods Resells them to other businesses

Retailers Sells goods to final consumer Purchases from intermediary and re-sells

Direct and Indirect Channels Direct Distribution- occurs when the producer sells goods or services directly to the consumer with no intermediaries Indirect Distribution-involves one or more intermediaries

Class Assignment Work with a partner. Trace the distribution channel of selected product from producer to final consumer. Identify how each intermediary (or channel member) marks up the price to make a profit and how that impacts the price to the final consumer. Prepare in a PPT slide or presentation.