1.3.4 - Distribution

What is a channel of distribution?

The path that a product follows from its producer to the final customer.

Why is a distribution channel important?

Even high-quality products can fail if they do not reach consumers in a timely and convenient way.

What are intermediaries in distribution?

Organisations that assist in transferring products from producers to customers.

What are the three main types of intermediaries?

Retailers, Wholesalers, and Agents.

What is the role of retailers in the distribution process?

They sell directly to consumers, forming the last link in the distribution chain.

What are e-tailers?

Online platforms through which retailers operate.

What is the primary function of wholesalers in distribution?

They act as intermediaries between producers and retailers, handling large volumes of goods.

What does the term 'breaking bulk' mean in distribution?

Purchasing in large quantities from manufacturers and reselling in smaller amounts to retailers.

How do wholesalers improve the cash flow of manufacturers?

By providing immediate payment to the manufacturers.

How do wholesalers reduce administrative tasks for producers?

By allowing producers to deal with one wholesaler instead of multiple retailers.

How do wholesalers improve logistics efficiency?

By consolidating deliveries.

What extra benefit do wholesalers offer to retailers regarding facilities?

Offering extra storage space.

What is the role of an agent in distribution?

Agents represent producers by selling products to customers and earning a commission on each sale.

Do agents take ownership of the goods they sell?

No, they handle sales without taking ownership, focusing on connecting buyers and sellers.

What is direct selling?

A two-stage channel where products move straight from the manufacturer to the consumer without intermediaries.

Give three examples of direct selling methods.

Door-to-door sales, television shopping programmes, and company websites.

Describe the three-stage distribution channel.

The manufacturer sells to a retailer, who then sells to the consumer.

Which products typically use a three-stage distribution channel?

Leisure goods like fashion items or furniture.

Describe the four-stage distribution channel.

It adds a wholesaler between the manufacturer and retailer, before reaching the consumer.

What is a major implication of adding stages to a distribution channel?

Each additional stage requires a profit margin, which can raise the final price for consumers.

What is multi-channel distribution?

Using several selling methods at once to offer customer choice and expand market coverage.

What is a potential disadvantage of multi-channel distribution?

It has the potential to increase expenses.

How is online distribution for digital products delivered?

Through downloading or streaming over the internet.

Why is online distribution considered more sustainable?

It cuts costs by avoiding physical manufacturing and transport.

What are the key factors affecting the choice of a distribution channel?

Product type, target market, and business size.