1. Where do products come from?
Distribution
Where do products come from?

2. Channels of Distribution
The path from manufacturer to the final user
Business – industrial user
Person - consumer

3. Channel Members Manufacturers – make the product
Intermediaries – move / resell the product
Consumers – use the product

4. Wholesalers Buy large quantities of goods
Resell the goods to another business
Rack jobbers – manage rack and product inside the store
Drop shippers – buy product from manufacturer, sell to retailer, and ship directly from one to the other (often raw materials)

5. Retailers Sell goods to consumers
Brick and mortar – physical building you shop at
Vending service – machine holds inventory
Catalog or online – stores inventory available from convenience of home

6. Agents Do not own products
Make money by connecting manufacturers, wholesalers, or retailers to one another
Very common in the food industry

7. MANUFACTURERS
AGENTS
WHOLESALE
RETAILERS
CONSUMERS

8. Manufacturer to Consumer
Factory outlet or farmer’s market
Home sales call, door-to-door sales
Catalogs from manufacturers
Telemarketing
Online sales (manufacturer’s site)

9. MANUFACTURERS
AGENTS
WHOLESALE
RETAILERS
CONSUMERS

10. Manufacturer to Retailer to Consumer
Commonly used for merchandise that dates quickly or needs servicing
Fashion apparel and automobiles
Large chain stores also use this method

11. MANUFACTURERS
AGENTS
WHOLESALE
RETAILERS
CONSUMERS

12. Manufacturer to Wholesaler to Retailer to Consumer
Items that are always carried in stock
Items include, supermarket items, flowers, candy, and stationary supplies

13. MANUFACTURERS
AGENTS
WHOLESALE
RETAILERS
CONSUMERS

14. Manufacturer to Agents to Wholesaler to Retailer to Consumer
Manufacturers who don’t want to bother with the selling process
Because of so many intermediaries, prices are higher

15. MANUFACTURERS
AGENTS
WHOLESALE
RETAILERS
CONSUMERS

16. Manufacturer to Agents to Retailers to Consumers
Again, manufacturers focused on production and not sales
Examples include expensive cookware, meat, cosmetics, and many supermarket items

17. Direct or Indirect Distribution
Direct – manufacturer to consumer
Indirect – manufacturer to intermediary to consumer